Post date: May 25, 2012 11:4:45 AM
ATHENS, GREECE (MAY 25, 2012) (REUTERS) - The Athens Stock Exchange opened at a historical low on Friday (May 25) with the general index dropping below the psychological limit of 500 points, something the market has not seen in over 20 years.
The Athens stock exchange general index drops below 500 points at opening, taking the market back to 1989 levels.
The recent poll showed the Greek anti-bailout leftist SYRIZA party leading with 30 percent of the vote, ahead of a June 17 election that is deemed critical to the country's continued membership of the euro zone.
This caused extra stress to the local market, as fears grow that the parties would not be able to form a government after the new election.
Greece was forced to call a repeat election after a May 6 vote left parliament divided evenly between groups of parties that support and oppose austerity conditions attached to a 130 billion euro rescue agreed with lenders in March.
Meanwhile, European shares rallied on Friday (May 25) after stinging losses earlier in the week, as bargain hunters stepped in to buy stocks that had fallen sharply on fears over the global economy, while hopes of new aid measures also boosted equities markets.
However, investors cautioned that any rally in European equities markets could be short-lived, due to lingering fears over Greece.
Some traders have said that fears that Greece will be forced out of the euro zone currency bloc, which in turn would disrupt world markets and hit other European economies, will cause European authorities to step in with new aid measures.
Credit Agricole said in a research note that the European Central Bank (ECB) could announce new stimulus measures next month, such as another round of emergency funding for banks in the region.