‘Cool’ fall in the Stock Exchange, with ‘moderate’ turnover

Her Eleftherias Kourtali

Strong drop, calm, strengthening of the pressures again and again … calm, was the current … story of the Athens Stock Exchange, due to the cracks caused by the geopolitical developments, in a meeting with a clear predominance of sellers as well as strong fluctuations .

Although the opening sent the General Index below 930 points with losses of more than 2%, then there were supports mainly from the blue chips, due to the calmness of the international indices, thus avoiding the “panic” but also to maintain the 940 units at the end, receiving a “signal” from the mild image of Wall Street.

“Despite the split of 950 units, the buyers’ reflexes mobilized in the area of ​​930 units, confirming, at the moment, that it constitutes a strong support area”, as commented by Dimitris Tzanas of Kyklos Securities.

Thus, in the statistics of the session, the General Index recorded losses of 0.54% at 944.18 points, while the turnover amounted to 79.97 million euros.

The image of the market

The index of high capitalization fell by 0.45% to 2,309.72 points, while at -1.02% the index of medium capitalization closed at 1,573.49 points.

The banking index fell by 0.54% to 718.99 points, with Alpha Bank recording losses of 0.15%, Piraeus falling by 0.19%, while at -1.28% and -0, The losses for Ethniki and Eurobank amounted to 52%.

From the non-banking blue chips ELPE, OTE and Jumbo stood out with profits of more than 1%, while PPC and Motor Oil closed positively. Coca Cola recorded the biggest losses -3.36%, followed by Quest and Sarantis with a drop of more than 2% and Titan and Terna Energeiaki with losses of more than 1%.

Basic support is 930 units

Investors are coming “face to face” with the assessment of the news related to the rapid developments in the “Ukrainian issue”, as noted by Petros Steriotis, a certified financial analyst. Global capital markets seem to be turning to traditional stock market “dogmas” of “safe havens” in times of (potentially) “storm” like the current one, while geopolitical insecurity may put investors’ forecasts in the locker room of monetary policy in large economies.

With the international environment not helping, the Stock Exchange continues to seek direction, aiming to behave calmly in the possible “imported” liquidation trends, as Mr. Steriotis points out. While the recent and multi-year highs of 970 are acting as a “sword of Damocles” for the General Index, the “non-optimal hand” as well as the diagram analysis make the defense of 930 points of paramount importance.

The escalation of the crisis in Ukraine after the Putin speech and the “response” from the West that followed, caused shocks and intense instability in the markets with investors turning away from risk and to safe havens. Historically, however, geopolitical risks tend to be reflected through commodity markets, and today certainly what investors need to watch closely is gas, analysts point out.

Europe is still heavily dependent on gas supplies from Russia, and analysts say even a small reduction in Russian supply could have a significant impact on prices and industrial production in Europe. This could also pose a transmission risk to European inflation (gas prices were already responsible for around 1% of the annual Eurozone consumer price index in 2021), ECB policy, consumer spending, political stability and risk assets in general.

The scenarios for the markets

According to Goldman Sachs, a conflict in Ukraine combined with “punitive sanctions” could push US stocks into a 6% dip, with the worst losses in Europe and Japan at 9.3% and 8, respectively. 6% respectively. According to Deutsche Bank, typical geopolitical sell-offs on the S&P 500 are around 6% to 8% on average. It takes about three weeks for stocks to reach these levels and another three to recover to pre-geopolitical levels, he said.

For its part, UBS notes that investing in commodities and energy stocks is an attractive option to help investors hedge risks in their portfolio from current geopolitical tensions. Energy prices are likely to rise in the event of an escalation around Ukraine, as well as if calm prevails, amid growing demand and somewhat limited supply

“While the course of the Russia-Ukraine crisis remains unclear with potentially growing market volatility in the short term, tighter monetary policy, in our view, remains the key risk for equities,” said JP Morgan. Excessively restrictive monetary policy could lead to an immediate policy error, especially if the economic cycle continues to deteriorate. At the same time, the Russia / Ukraine crisis could force a reassessment of the Fed’s tightening, making central banks less aggressive, and policymakers may consider additional fiscal stimulus, according to the US bank.