Political uncertainty in Greece continued to rattle the country’s stock and bond markets Wednesday, a day after Athens’ main equity index suffered its sharpest single-day loss since 1987.

The Athex GD, -4.28% — which closed Tuesday’s session almost 13% lower — dropped another 4%, although it later recovered to trade just 1.5% lower on the day. Read: Greece’s stock market just suffered its worst collapse ever

The yield on Greece’s 10-year government bond GR:GR10YT rose 0.55 of a percentage point, to 8.42%, reflecting a drop in bond prices, as investors rushed to assets deemed to be safer at times of volatility. The yield on 10-year German government bonds TMBMKDE-10Y, -0.526% hit a fresh all-time low of 0.678%.

Although the yield of the Greek 10-year bond remains far below the peak of more than 30% in the depths of the euro crisis in early 2012, it still represents a fresh and relatively sudden burst of nerves and a far cry from the 5.5% level at which yields stood just three month ago.

Earlier in the week the Greek government announced that parliament would vote on a new president on Dec. 17 — two months ahead of schedule — to replace Karolos Papoulias, whose five-year term was slated to end in March.

That sparked fears Greece’s radical left opposition Syriza party could win national elections if presidential voting rounds fail to find a solution acceptable to all. The latest opinion polls suggest that Syriza, which threatens to tear up the reform and austerity program that has accompanied the bailout, would win national elections by a three to six percentage-point margin. Read: Here are 2 ways for Greece to get out of debt

“’Grexit’ had fallen off the list of things that European investors are worried about but it returned with a vengeance yesterday,” said Ian Williams, an economist and strategist at brokerage Peel Hunt, referring to the prospect of Greece exiting the European Union.

Paul Donovan, an economist at UBS said this issue goes beyond Greece.

“With elections in Spain and Portugal next year, and the ever-possible risk of Italian elections, this is a reminder of euro political risk,” he said.

An expanded version of this report appears on WSJ.com