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Ukraine War Wipes $10 Billion Off Athens Stock Exchange

Athens Stock Exchange Ukraine war
More than $10 billion were wiped off since the invasion of Ukraine. Credit: AMNA

The Athens Stock Exchange has recorded losses of 13.43 percent while the market’s capitalization has fallen by 9.345 billion euros ($10.1 billion) since the Russian invasion of Ukraine.

The Large Cap index has fallen by 15.0 percent and the Mid Cap index by 8.6 percent. The heaviest losses (-26.64 percent) were recorded in banking.

The dive in the Athens Stock Exchange follows the pattern of all major markets. U.S. stock markets took a dive Monday as another big leap for oil prices fueled by Russia’s war in Ukraine threatens to squeeze inflation’s grip on the global economy.

The S&P 500-stock index closed down almost 3 percent, while the Dow was off almost 2.4 percent, or nearly 800 points, to 32,817. The Nasdaq composite was 3.6 percent lower. Stocks are on pace for their worst daily losses since Russia invaded Ukraine.

Markets worldwide have swung wildly recently on worries about how high prices for oil, wheat and other commodities produced in the region will go because of Russia’s invasion, inflaming the world’s already high inflation rate.

The conflict in Ukraine also threatens the food supply in some regions, including Europe, Africa and Asia, which rely heavily on the vast, fertile farmlands of the Black Sea region, known as the “breadbasket of the world.”

Rally at the Athens Stock Exchange before the Russian invasion

Before Putin’s decision to invade Ukraine, the Athens Stock Exchange (ATHEX) was in the midst of a rally that began at the end of 2021 and reached a peak in late January when the index climbed to levels unseen since 2014.

The last time the main index stood above 950 points was in December 2014.

Earlier in January, an HSBC report recommended the purchase of Greek bank stocks, seeing great potential for cash flow in the local market. Cash duly flowed into the bourse, with profits continuing to rise.

The new capital inflows were focused on the banking sector, with the banking index gaining 13.69 percent since the beginning of 2022, almost as much as the gains for the whole of 2021.

Russia’s invasion of Ukraine changed all that. However, Goldman Sachs and UBS are still giving a vote of confidence in the Greek economy and the Greek stock market.

Goldman estimated that the General Price Index will rise to 1,175 points in the next 12 months while UBS raised its estimates for growth in Greece, despite the impact of the war in Ukraine.

Specifically, it raised its growth forecast for 2022 to 5.5 percent or 1.5 basis points above market average estimates and 60 basis points above the EU Commission’s forecasts.

Related: How the War in Ukraine Affects the Greek Economy

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