SocGen: Grexit could see Euro Stoxx drop 50%

The Euro Stoxx 50 could fall by almost 50% in the event of a disorderly Greek exit from the eurozone, analysts at Société Générale calculate.

As talk of a Greek exit grows louder amid reports of eurozone nations and financial institutions preparing contingency plans, SocGen's cross-asset research team said such a scenario remains far from priced in. An orderly exit may see the index of blue-chip eurozone companies fall by less than 10%, according to the analysts, but a disorderly break-up could prompt a 50% drop and lead to eurozone profits declining for two years, a rise in bond yields, and a jump in the equity risk premium. While the orderly exit forecast takes into account the diminished correlation between Greek and eur...