The Athens stock exchange ended its torrid first day of trading in five weeks 16.2 percent lower, after it reopened for the first time in five weeks. Greek banking stocks were the worst hit with Alpha Bank, Attica Bank and Eurobank Ergasius, Bank of Piraeus and the National Bank of Greece all closed around 30 percent lower - the daily volatility limit. Steep losses were seen in stocks outside of the banking industry too. There was further bad news for the Greek economy earlier, with flash manufacturing PMI figures for July down to 30.2 the lowest reading since Markit began compiling data in 1999.

To make matters worse, an economic sentiment index for Greece hit its lowest level since October 2012 in July with capital controls and political uncertainty weighing on sentiment, according to the IOBE think tank that conducted the survey.

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Ahead of the much-anticipated open, traders were bracing themselves for a day of "losses and volatility." Greek traders told Reuters on Sunday that they expected a torrid day of losses when the stock market opened. Takis Zamanis, chief trader at Beta Securities, told the news agency that "the possibility of seeing even a single share rise in tomorrow's session is almost zero." Meanwhile, the chairman of the Hellenic Capital Markets Commission told CNBC ahead of the open that his commission would monitor the market closely on Monday. "We are not participants in the market, we are the supervisors and we are waiting to see what happens," Kostas Botopoulos told CNBC Europe's "Squawk Box" Monday. "It's very important that we're opening, of course we expect pressure on the Greek stock market but we'll be there to monitor what happens." He said there would be no state intervention into the market, saying: "We're looking to see when it will stabilize, at which prices, and what the perception of the Greek market is from domestic and foreign investors."Focus for the day is likely to be on the losses among Greek banking stocks, which constitute around 20 percent of the main Athens index. Restrictions have been put in place to stem capital flight, however.

Craig Erlam, senior market analyst at currency trading platform OANDA, said the banks had been "hit considerably by the events of this year and now need to be recapitalized at the very least."

The rules

Local investors will face restrictions that reflect the continuing capital controls on Greek banks that limit withdrawals to 60 euros a day. This means that domestic investors can only buy shares with fresh money from abroad or cash they have to hand, Reuters reported last week. They can also buy shares with money coming from security sales or dividends or cash remaining with their security firms. Foreign investors may trade freely, however. The reopen comes after a prolonged period of financial uncertainty in Greece. The stock market shut when capital controls were imposed on Greek banks at the end of June, when it looked increasingly likely that Greece was about to go bankrupt and leave the euro zone. An eleventh-hour deal between the Greek government and lenders over a third bailout program for Greece worth 86 billion euros was agreed, however, pulling the country back from the brink of an unprecedented "Grexit" from the single currency union. Greek banks then reopened on July 20. Read MoreGreece's Tsipras on shaky ground, warns of elections Although the finer details of a bailout are still being hammered out between lenders, the country is deemed to have stabilized enough for the stock market to reopen. Market analysts warned that Monday was likely to be a day of losses, however. "While it would be easy to suggest that today's reopening of the Greek stock market is a key step on the road to some form of normalization, it is likely to be anything but," according to Michael Hewson, chief markets analysts at CMC Markets, who warned of "volatility and losses."

Uphill struggle

Given that the International Monetary Fund (IMF) – one of the country's lenders- has threatened to pull out of a third bailout package without debt relief granted to Greece, the bailout itself is looking increasingly shaky. Countries like Germany oppose debt relief for Greece, fearing that it would set precedence for other indebted euro zone countries.

Read MoreCan the Greek bailout survive without the IMF? Time is of the essence for Greece, however, as it needs a bailout to be agreed (and funds disbursed) before a 3.2 billion euro debt repayment is due to the European Central Bank on August 20. Against such an uncertain backdrop, analyst Hewson pointed out that Greece still faced an uphill struggle. "Aside from the fact that we could well see some big losses, there is the small matter that not only are the internal politics in Greece likely to remain difficult it is also likely to be extremely problematic to reconcile the positions the divergent positions of the IMF and Germany on debt relief, particularly given the proximity of the next debt deadline on the 20th August."