After five-week shut down, Greek stocks plummet

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Greece's stock market suffered heavy losses on Monday, plunging nearly 23 percent at the open before recovering slightly, after a five-week shutdown brought on by fears the country was about to be dumped from the euro zone.

One fund manager described it as "herd behavior" and said few people were buying.

The main Athens stock index .ATG was down more than 18 percent in midday trading after an initial plunge that was larger than any one-day loss experienced on the bourse. By contrast, the broad European FTSEurofirst 300 index gained slightly .FTEU3.

See photos of the nearly 23 percent plunge:

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Greece's stocks plunge after market reopens
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After five-week shut down, Greek stocks plummet
An employee of the Athens' Stock Exchange speaks on the phone in the reception hall in Athens, Greece, Monday, Aug. 3, 2015. Greece's main stock index plunged over 22 percent as it reopened Monday after a five-week closure, giving investors their first opportunity since June to react to the country's latest economic crisis. (AP Photo/Yorgos Karahalis)
A man walks with his dog past a mural at a central neighborhood in Athens, Greece, on Sunday, Aug. 2, 2015. In Athens, the heads of the EU-IMF audit mission met with the Greek ministers of finance and economy with the talks focusing on bank recapitalisation, privatisations and fiscal targets, the finance ministry said. (AP Photo/Yorgos Karahalis)
An employee of the Athens Stock Exchange looks at stock prices which are on display on a ticker screen in Athens, Greece, Monday, Aug. 3, 2015. Greece's main stock index plunged over 22 percent as it reopened Monday after a five-week closure, giving investors their first opportunity since June to react to the country's latest economic crisis. (AP Photo/Yorgos Karahalis)
Stock index boards are pictured in the lobby of the Athens Stock Exchange in Athens on August 3, 2015. Greece's stock exchange reopened August 3 with a drop of more than 22 percent after a five-week shutdown imposed by the country's debt crisis and capital controls, with the nation's outflow-hit lenders leading the way. The ATHEX plunged to 615.72 points a few minutes after opening at 7:30 GMT, down 22.82 percent from its June 26 close. AFP PHOTO / ARIS MESSINIS (Photo credit should read ARIS MESSINIS/AFP/Getty Images)
A European Union (EU) flag flutters outside the Athens' Stock Exchange in Athens, Greece, Monday, Aug. 3, 2015. Greece's main stock index plunged over 22 percent as it reopened Monday after a five-week closure, giving investors their first opportunity since June to react to the country's latest economic crisis. (AP Photo/Yorgos Karahalis)
A man takes a snapshot of a stock index in the lobby of the Athens Stock Exchange in Athens on August 3, 2015. Greece's stock exchange reopened August 3 with a drop of more than 22 percent after a five-week shutdown imposed by the country's debt crisis and capital controls, with the nation's outflow-hit lenders leading the way. The ATHEX plunged to 615.72 points a few minutes after opening at 7:30 GMT, down 22.82 percent from its June 26 close. AFP PHOTO / ARIS MESSINIS (Photo credit should read ARIS MESSINIS/AFP/Getty Images)
A man walks past an index board at the reception hall of the Athens' Stock Exchange in Athens, Greece, on Monday, Aug. 3, 2015. Greece's main stock index plunged over 22 percent as it reopened Monday after a five-week closure, giving investors their first opportunity since June to react to the country's latest economic crisis. (AP Photo/Yorgos Karahalis)
Employees of the Athens Stock Exchange talk as they stand behind a ticker screen where stock prices are on display in Athens, Greece, on Monday, Aug. 3, 2015. Greece's main stock index plunged over 22 percent as it reopened Monday after a five-week closure, giving investors their first opportunity since June to react to the country's latest economic crisis. (AP Photo/Yorgos Karahalis)
A man carries a toy as he leaves a street market in Athens, Greece, on Sunday, Aug. 2, 2015. In Athens, the heads of the EU-IMF audit mission met with the Greek ministers of finance and economy with the talks focusing on bank recapitalisation, privatisations and fiscal targets, the finance ministry said. (AP Photo/Yorgos Karahalis)
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Banking shares, which make up about 20 percent of the Greece index, were particularly hard hit. National Bank of Greece (NBGr.AT), the country's largest commercial bank, was down 30 percent, the daily volatility limit. The overall banking index .FTATBNK was also down to its 30 percent limit.

Greece's banks have seen deposits severely depleted as Greeks have withdrawn their euros for fear the would be forcibly converted into a new drachma outside the euro zone. The banks have been propped up by emergency money from the European Central Bank.

"Bank shares look like they have more room to slide on Tuesday before bids emerge," said the fund manager, who declined to be named. "It will take a few days for the market to balance out."

Some companies outperformed, mainly those with exposure abroad, although they still fell.

Greece's biggest telecoms operator OTE (OTEr.AT), along with jeweler Folli Follie (HDFr.AT) and aluminum producer Mytilineos (MYTr.AT), which are mainly exporters, saw their initial losses ease.

"Non-financial companies will have a better performance than the banks, since their prospects are brighter and are less exposed to the domestic market," said Manos Chatzidakis, an analyst at Beta Securities.

FEARS FOR FUTURE

Trading on the Athens bourse was suspended in late June as part of capital controls imposed to stem a debilitating outflow of euros that threatened to collapse Greece's banks and hurl the indebted country out of the euro zone.

Since then, Athens has agreed a framework bailout plan with its European Union partners in exchange for stringent reforms and budget austerity.

But implementation of the deal is some way off, keeping alive the threat of political and economic instability. There is also concern that Prime Minister Alexis Tsipras may need to call a snap election.

Monday's losses stemmed from a number of reasons. Negotiations on the new bailout might bog down, for example, leaving the government and banks perilously short of cash.

A report on Sunday in the newspaper Avgi, which is close to Syriza, said the government was seeking 24 billion euros ($26.37 billion) in a first tranche of bailout aid from international lenders in August.

Of this, the newspaper said, 10 billion euros was earmarked for an initial recapitalization of Greek banks, 7.16 billion euros to repay an emergency bridge loan and 3.2 billion euros to repay Greek bonds held by the European Central Bank and others.

The European Commission, however, believes an agreement in August is unlikely and that a new bridge loan will be needed.

Greeks themselves are being severely restricted. To limit the possibility of using shares as part of euro-flight, the government and ECB have said no extra money can be withdrawn by Greeks from deposit accounts to buy shares.

Greece's dismal economic prospects may also weigh on the market. The European Commission says the Greek economy will shrink by 2 to 4 percent this year, a return to the recession that plagued the country for six years until 2014.

On Monday, a survey showed Greek manufacturing activity plunged to a record low as new orders plummeted and the three-week bank shutdown caused serious supply problems.

Greece's economic sentiment also hit its lowest level in almost three years in July, a monthly report by the IOBE think tank showed.

SEE ALSO: Greek protests turning violent last month:

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Greece riots turn violent
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After five-week shut down, Greek stocks plummet
An anti-austerity protester throws a bottle at riot police in Athens, Wednesday, July 15, 2015. Greece's prime minister was fighting to keep his government intact in the face of outrage over an austerity bill that parliament must pass Wednesday night if the country is to start negotiations on a new bailout and avoid financial collapse. The raft of consumer tax increases and pension reforms will condemn Greeks to years of more economic hardship and has fueled anger among the governing left-wing Syriza party. (AP Photo/Petros Giannakouris)
Riot police use their shields against petrol bombs lobbed by protesters during an anti-austerity protest on July 15, 2015. Anti-austerity protesters hurled petrol bombs at police in front of Greece's parliament on Wednesday as lawmakers began debating deeply unpopular reforms needed to unlock a new eurozone bailout.Riot police responded with tear gas against dozens of hooded protesters who set ablaze parts of Syntagma square in central Athens. AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
Masked protesters stand amid tear gas in front of thre Greek parliament in Athens during an anti-austerity protest on July 15, 2015. Anti-austerity protesters hurled petrol bombs at police in front of Greece's parliament on Wednesday as lawmakers began debating deeply unpopular reforms needed to unlock a new eurozone bailout.Riot police responded with tear gas against dozens of hooded protesters who set ablaze parts of Syntagma square in central Athens .AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
Riot policeman tries to avoid a petrol bomb thrown by anti-austerity protesters in Athens, Wednesday, July 15, 2015. Greece has a tentative rescue deal, but relief that it is not falling out of the euro is unlikely to last long: its economy has taken a huge hit. Months of political brinkmanship, uncertainty and bank closures have hurt companies and brought everyday business to a standstill. (AP Photo/Petros Giannakouris)
Riot police is on fire try as anti-austerity protesters throw petrol bombs during clashes in Athens, Wednesday, July 15, 2015. Greece has a tentative rescue deal, but relief that it is not falling out of the euro is unlikely to last long: its economy has taken a huge hit. Months of political brinkmanship, uncertainty and bank closures have hurt companies and brought everyday business to a standstill. (AP Photo/Emilio Morenatti)
Anti-austerity protesters clash with riot police during a rally in Athens, Wednesday, July 15, 2015. Greece has a tentative rescue deal, but relief that it is not falling out of the euro is unlikely to last long: its economy has taken a huge hit. Months of political brinkmanship, uncertainty and bank closures have hurt companies and brought everyday business to a standstill. (AP Photo/Petros Giannakouris)
Riot police try to avoid petrol bombs thrown by anti-austerity protesters during clashes in Athens, Wednesday, July 15, 2015. Greece has a tentative rescue deal, but relief that it is not falling out of the euro is unlikely to last long: its economy has taken a huge hit. Months of political brinkmanship, uncertainty and bank closures have hurt companies and brought everyday business to a standstill. (AP Photo/Emilio Morenatti)
Riot police try to avoid petrol bombs thrown by anti-austerity protesters during clashes in Athens, Wednesday, July 15, 2015. Greece has a tentative rescue deal, but relief that it is not falling out of the euro is unlikely to last long: its economy has taken a huge hit. Months of political brinkmanship, uncertainty and bank closures have hurt companies and brought everyday business to a standstill. (AP Photo/Emilio Morenatti)
Riot police is on fire as anti-austerity protesters throw petrol bombs during clashes in Athens, Wednesday, July 15, 2015. Greece has a tentative rescue deal, but relief that it is not falling out of the euro is unlikely to last long: its economy has taken a huge hit. Months of political brinkmanship, uncertainty and bank closures have hurt companies and brought everyday business to a standstill. (AP Photo/Emilio Morenatti)
Riot police try to avoid petrol bombs thrown by anti-austerity protesters during clashes in Athens, Wednesday, July 15, 2015. Greece has a tentative rescue deal, but relief that it is not falling out of the euro is unlikely to last long: its economy has taken a huge hit. Months of political brinkmanship, uncertainty and bank closures have hurt companies and brought everyday business to a standstill. (AP Photo/Emilio Morenatti)
Members of the Communist-affiliated PAME labor union march during an anti-austerity rally in Athens, Wednesday, July 15, 2015. Greece has a tentative rescue deal, but relief that it is not falling out of the euro is unlikely to last long: its economy has taken a huge hit. Months of political brinkmanship, uncertainty and bank closures have hurt companies and brought everyday business to a standstill. (AP Photo/Petros Giannakouris)
Members of the Communist-affiliated PAME labor union shout slogans during an anti-austerity rally in Athens, Wednesday, July 15, 2015. Greece has a tentative rescue deal, but relief that it is not falling out of the euro is unlikely to last long: its economy has taken a huge hit. Months of political brinkmanship, uncertainty and bank closures have hurt companies and brought everyday business to a standstill. (AP Photo/Petros Giannakouris)
Riot police officers run away from fire as anti-austerity protesters throw petrol bombs during clashes in Athens, Wednesday, July 15, 2015. Greece's prime minister was fighting to keep his government intact in the face of outrage over an austerity bill that parliament must pass Wednesday night if the country is to start negotiations on a new bailout and avoid financial collapse. The raft of consumer tax increases and pension reforms will condemn Greeks to years of more economic hardship and has fueled anger among the governing left-wing Syriza party. (AP Photo/Emilio Morenatti)
Protesters raise a Greek flag with a writing reading ''Greece we love you'' during a rally outside the Greek Parliament in Athens, Wednesday, July 15, 2015. Greece's prime minister was fighting to keep his government intact in the face of outrage over an austerity bill that parliament must pass Wednesday night if the country is to start negotiations on a new bailout and avoid financial collapse (AP Photo/Emilio Morenatti)
Riot police stand amid petrol bombs threw by protesters during an anti-austerity protest on July 15, 2015. Anti-austerity protesters hurled petrol bombs at police in front of Greece's parliament on Wednesday as lawmakers began debating deeply unpopular reforms needed to unlock a new eurozone bailout.Riot police responded with tear gas against dozens of hooded protesters who set ablaze parts of Syntagma square in central Athens .AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
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