Stock market profits due to ECB, overperformance in banks

Her Eleftherias Kourtali

The decision of the ECB to significantly support Greece after the end of the PEPP gave a strong impetus to the Athens Stock Exchange, explicitly stating in its announcement that through enhanced and more flexible reinvestments and the possibility of reactivating PEPP if necessary, it will continue to farm Greek bonds – despite the fact that they will not participate in the regular QE program, “in order to avoid interruption of purchases in this country, which could negatively affect the transmission of monetary policy to the Greek economy, while it the effects of the pandemic “.

Turnover was slightly higher than in previous sessions, with buyers turning to bank stocks that outperformed, while significant support was given to the General Index and selected blue chips.

Thus, in terms of meeting statistics, the General Index recorded an increase of 1.07% and closed at 892.83 points, while the turnover stood at 66.6 million euros and the volume at 20.7 million

According to the technical analysis, the first strong support for the General Index is the area of ​​860 points, while the resistance point is located at 900 points.

The index of high capitalization increased by 1.22% to 2,145.6 points, while the index of medium capitalization increased by 1.41% to 1,497.26 points.

The banking index outperformed with gains of 2.74% to 580.91 points, with Alpha Bank closing at + 3.02%, Eurobank at + 2.87%, Piraeus Bank at + 1.53% and NBG Bank at + 2.79%.

In the non-banking blue chips, Viohalco stood out with a rally of 5.8%, followed by ELVALHalkor with gains of 3.10% and Aegean with an increase of 2.11%. On the other hand, only PPC (-0.37%), HELEX (-0.27%) and PPA (-0.11%) fell.

The ECB mark

The attitude of the central banks will henceforth be decisive for the course of the international markets from which the ATHEX also gets a “signal”, at a time when the ECB decisions for Greece will already have an impact on investment foreign portfolio strategies for the new year.

The ECB has solved the riddle of how to support Greece and Greek bonds to avoid fragmentation in the eurozone after the end of the PEPP, which led to a rally of Greek bonds and significant profits on the ATHEX.

The ECB’s “response” to our country was to leave open the option of reactivating PEPP if necessary, using the remaining approximately € 100 billion and – most importantly, extend the duration of the reinvestment program to the end. of 2024, but strengthened its flexibility, using the funds from PEPP bonds that expire with a clear emphasis on Greece.

According to analysts, this was also what the ECB had to do. To make it clear to the markets that it is “there” and will support Greece. “If the ECB is clearly committed to supporting Greece by shifting the burden of flows from PEPP bonds ending in Greek bonds, it will be a very credible and constructive message to investors,” JP Morgan said a few days ago. pointing out that it maintains long positions in Greek bonds compared to bonds of the entire region.

However, Loukas Papaioannou, an economist at Fast Finance, chooses a more … cool approach. As he notes, despite the happy reaction of the Greek market today, we must keep in mind the “contrarian” view, that we should not exaggerate its potential, nor downplay its inherent weaknesses and shallowness, taking into account the low recent tumors. At least until we get out of the torturous accumulation of the range of 850-930 units, because the price can be high, both for the shares and for the bonds.