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Greek Stocks Slide Most Since October 2008 After Election

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Greek Stocks Slide Most Since 2008
A European Union (EU) flag, left and a Greek national flag, right, fly outside the headquarters of the National Bank of Greece SA, the country's largest lender. Photographer: Angelos Tzortzinis/Bloomberg

May 7 (Bloomberg) -- Greek stocks tumbled the most in six months after the country’s two main political parties failed to achieve a combined majority in yesterday’s election as voters flocked to anti-austerity parties.

National Bank of Greece SA, the country’s largest lender, plunged 8.3 percent. Public Power Corporation SA, the nation’s biggest electricity producer, fell 14 percent.

The benchmark ASE Index slid 6.7 percent to 643.87 at the close of trading in Athens, with 53 of 59 stocks declining. The gauge earlier dropped as much as 8.3 percent, the largest decline since October 2008. The measure has fallen 5.4 percent this year as the country remains mired in recession with unemployment at a record high.

“Greece has entered into political uncertainty,” Manos Giakoumis, research director at Euroxx Securities SA in Athens, wrote in a note to clients. “The next days are crucial for political developments and the potential formation of a coalition/national unity government or the call for new elections.”

New Democracy and the socialist Pasok party, rivals until the country’s crisis threw them together into a national government, are two seats short of the 151 seats needed for a parliamentary majority.

New Democracy led in the election, receiving 19 percent of the vote and 108 seats in the 300-seat Parliament. Syriza, a coalition of left parties, got 17 percent to score 52 seats, while Pasok came third with 13 percent and 41 seats.

Syriza leader Alexis Tsipras said today his party will honor its election pledge to overturn austerity policies, rejecting an overture to join a national salvation government with New Democracy.

Venizelos Proposal

Pasok leader Evangelos Venizelos proposed a government to include all pro-European parties, including Syriza and Democratic Left; that members of his Pasok party didn’t need to be in the new government; and that the prime minister of this government should be a person of wide acceptance.

The government should be underpinned by the principle that Greece remains in the euro and begin talks with European Union partners on changing some of the austerity measures included in the bailout plan, he said. Venizelos commented after meeting with New Democracy leader Antonis Samaras.

National Bank of Greece, the country’s largest bank, slid 8.3 percent to 1.55 euros, its biggest drop since April 11. Alpha Bank, Greece’s second largest lender, plunged 19 percent to 84 euro cents, its biggest drop in seven months. EFG Eurobank Ergasias SA tumbled 19 percent to 51.2 cents and Piraeus Bank SA fell 13 percent to 22.9 cents.

Public Power Corp. retreated 14 percent to 2.14 euros, its biggest decline since September, 2008

Hellenic Telecommunications Organization SA, Greece’s largest telephone company, dropped 9 percent to 2.12 euros.

Opap SA, Europe’s largest publicly listed gambling company, dropped 7 percent to 6.21 euros.

To contact the reporter on this story: Tom Stoukas in Athens at astoukas@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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