Today's Major Market Move: Greek Equity Market Drops 2.5% in Tuesday's Session

Overall it was a strong day for equity markets around the globe with only 19% of benchmark equity indexes finishing in the red. One of those 19% was the Greek FSTE/ASE 20 Index which was the second worst performer, closing down 2.5%. The worst performer was a frequent visitor to this blog, Cyprus, which tanked 7.5%. However we're going to focus on Greece because there was some interesting news that was revealed today.

First, here's the list of the bottom 10 benchmark equity indexes from today's session:

Click here for the live table.

Now before we get into today's news concerning Greece, let's do a quick recap. The first Greek bailout took place way back in the stone age on May 2, 2010. The EU and IMF joined together to provide a 110 billion euro loan package where the timing of the bailout was connected to a large debt repayment that was due on the 19th.

The second Greek bailout was 'first' officially agreed to in October of 2011. We say 'first' in quotes because, as we discussed in our November 23rd post, negotiations are still continuing. The parties initially agreed to a 50% write down but Greece has opted to go for more. Other details remain to be sorted out as well, such as interest rates and repayment schedules. The European authorities have countered by withholding funds until the deal is finalized.

Which brings us to today. Greece has fired back by announcing that if they don't get their money, they will have no choice but to leave the Eurozone. Here's more from the AP:

Greece's government warned Tuesday that the debt-crippled country will have to ditch the euro if it fails to finalize the details of its second, euro130 billion ($169 billion) international bailout and that more austerity measures may need to be implemented.

A key component of the package, which was agreed last October, is that Greece has to persuade its private creditors like banks and investment firms to take a steep hit on the value of their holdings of Greek debt. Greece has the highest debt burden relative to the size of its economy in the whole of the 17-nation eurozone and the writedown will help get it down to more manageable, though still high, levels.

Spokesman Pantelis Kapsis said that negotiations in the next three or four months with international debt monitors will "determine everything," including whether Greece escapes a disastrous bankruptcy.

Going back to the Greek equity market, after today's drop the FTSE/ASE 20 Index is precariously sitting just above the 2011 lows.

Click here to go to the live chart.