Political developments rocked the stock market

Strong were the shocks caused by the political developments in the Athens Stock Exchange today, which briefly returned to the zone of 850 points, even losing the gains of the week, which it built up after a lot of effort by withstanding the selective pressures of the previous days.

In particular, the General Index closed with a drop of 2.11% at 849.23 points, while today it moved between 847.63 points (-2.29%) and 870.22 points (+0.31%). The turnover amounted to 56 million euros and the volume to 29.65 million pieces, while 3.2 million pieces were traded through pre-agreed transactions.

The high-cap index closed down 2.46%, at 2,045.45 points, while the Mid Cap closed at -1.02% at 1,369.09 points. The banking index closed down 3.46% at 536.86 points.

The image of the market appeared to be heavily burdened today by the political developments with the resignation of the head of the Ministry of Internal Affairs P. Kontoleon as well as the governor. of Prime Minister Gr. Dimitriadis.

Markets in Europe and the US in general came under quite a bit of pressure when the US labor market data was announced, but have largely recovered in the process, but not the ASE.

For the week, however, the General Index lost 0.21%, while the FTSE 25 fell by 0.22%. The banking index saved the week’s gains to 3%.

Banks, risks, holidays

The banks came back to the fore with the half-year results they announced last week, M. Hatzidakis of Beta Securities points out in his weekly analysis. The overall picture was highly positive with estimates now being revised upwards for the full year while significant progress in portfolio consolidation was accompanied by strengthening profitability in the recurring revenue segment.

The banking boom revived the market’s morale by awakening other companies from the large capitalization in a period that is anything but lively for the Greek Stock Exchange. At the same time, the announcement of a series of business agreements or discussions for the completion of acquisitions (Autohellas, Lamda Development, Euromedica, ADMIE, Anemos, Cenergy, etc.) showed that the interest in development remains steadily prosperous and is not limited to companies in the energy sector.

The new mix was therefore supportive and put uncertainties (Ukraine, pandemic) in the background which, although they have reduced their influence on the markets, seem to maintain their momentum in the medium term. Of course, this did not prevent new risks from appearing and pricing in the foreground.

The crisis in US-China relations with regard to Taiwan and the possibility of early elections that have resurfaced as a scenario are currently the new uncertainties priced in the last session by the ASE. In particular, the scenario of early elections seems to create greater uncertainty for investors and it is no coincidence that the rise from this year’s lows began after the government’s categorical statements about the exhaustion of the four-year period. Be that as it may, the next few days will be more enlightening as to whether this concern has a basis or if it is another overreaction to the beloved tactic of the ASE in situations that have special characteristics.

Technical picture

Technically, the General Index reached – and perhaps exceeded – the limits of the possibilities given by the average daily trading reaching 876 points with a streak of seven consecutive bullish sessions. The crash with the 200-day moving average did not go unnoticed by the sellers who took the upper hand once the oscillators entered overbought price zones on the daily charts for the first time since January 18 (952 points).

The entry into overvalued zones and the multi-day bullish streak were rather expected to trigger profit-taking reflexes which have currently not spoiled the index’s upside. The correction is done with soft trading volumes and the first “resistance” limit is 840 units.

The second support level is located at 820 units and its breakdown will also mean the end of the upward movement from 779 units. Despite the two-day corrective movement, the buyers have not lost the battle and as long as the General Index is maintained above 840 units, the trend is on their side. In conclusion, we would expect the next meetings to have a procedural character due to the seasonality of lateral movements that usually prevail as we head towards the hard core of the summer holidays, concludes Mr. Hatzidakis.

On the dashboard

On the board now, Alpha Bank and PPC closed with losses of 5.73% and 5.05% respectively. The drop was over 4% in Piraeus and Lambda, over 3% in OPAP, Mytilene, Coca Cola and Ethniki and over 2% in Aegean, Quest, ELHA, Titan and Hellenic Petroleum.

GEK Terna, Eurobank, Viochalko, ADMIE and Sarantis were all down more than 1%, while Terna Energy and Jumbo closed slightly down. PPA and Motor Oil closed unchanged, while OTE closed at the end at +0.60%. The profits in EYDAP and Ellaktor exceeded 1%.