Euphoria over the Olympics "coming home" sent Greek equities surging by almost 8 per cent yesterday, held back only by the bourse's 8 per cent daily volatility limit. The stock exchange index closed up 122.69 points at 1663.69 and 183 of the 302 listed companies rose by the maximum allowable in one day of 8 per cent. The drachma also advanced against both major European currencies and the dollar.
Not factored in by the bourse, the homecoming of the 2004 Olympic Games was a pleasant surprise and sent a range of stocks surging, ranging from telecommunications to building and to other sectors which stand to benefit from the games.
In particular, investors now believe that a range of infrastructure projects will come on stream more quickly than they would have if Athens had not won the games.
Given the limited scope for interest rate cuts in the near term and stubborn inflation, the award of the 2004 Games - announced after local market hours on Friday - changed the landscape for equities, brokers say.
Some are predicting a gain of as much as 18 per cent overall in the index as a result of the Games.
Stock market players also got a reconfirmation of the government's commitment to the single European currency over the weekend as the Prime Minister, Mr Costas Simitis, pledged to take any needed measures to ensure Greece meets the criteria by 1999.
