Stock market: Today’s rise ‘saved’ the sign of the week

With a jump of more than 2%, the Athens Stock Exchange welcomed the decision of MSCI to expand the securities in its Greek index, with buyers reactivating and giving a boost to the General Index for an increase above 860 points again.

In particular, the General Index closed with an increase of 2.43% to 867.03 points, while today it moved between 873.55 points (+ 3.20%) and 851.93 points (+ 0.65%). The turnover amounted to 120.69 million euros and the volume to 39.67 thousand units, while 3.9 million units were traded through pre-agreed transactions.

The high capitalization index closed with an increase of 2.37%, at 2,080.18 points, while at + 1.18% Mid Cap completed the transactions at 1,385.48 points. The banking index closed with gains of 2.70% at 561.21 points.

On a weekly basis, the General Index closed with an increase of only 0.03%, while the FTSE 25 fell by 0.52%. The banking index closed with losses of 3.79%.

On a tightrope

The Stock Exchange moved at a particularly nervous pace last week as the news from inflation can be considered anything but reassuring, says M. Hatzidakis of Beta Securities in his weekly comment. The new interest rate increases by the Fed for June and July have been priced in the existing listed issues of fixed performance while at the same time it has started to be priced in new issues of government and corporate securities.

The market expects in the near future the increase in borrowing costs to be transferred to loans to companies, with all that this implies for profit margins, the required return on new investments and the financing of acquisition projects.

In addition to the cost of money, the increase in interest rates raises the risk premium of the shares, affecting their theoretical fair value, thus limiting the potential upside margin. At the same time, the significant decline in the cryptocurrency market is creating serious scourges and fears of spreading pressure in organized markets.

Although Friday was a day of easing pressure inside and outside the walls, the stock market environment remains extremely volatile as no other developments have led to a discharge of the pending issues that currently lead investment decisions and maintain a climate of caution.

The first set of the results of the first quarter of the listed companies reflects the pressure of profit margins from the increase of energy costs and raw materials to a greater or lesser degree depending on the type of company. The activity does not seem to have been affected while the liquidity is maintained at satisfactory levels.

Unless something changes very soon the listed companies and especially the commercial companies will be called to answer the dilemma “market share or profitability” since the cost of sales will start to become demanding in terms of savings that can be realized and which may include skills or advantages to customers or suppliers.

The difficulties are therefore ahead and require much stricter stock selection criteria that will take into account financial soundness, the choice of a management formula that will protect the turnover and at the same time leave some satisfactory profitability as well as the history of dealing with difficult situations in the past.

Technical image

Technically, the General Index reacted from the 850 points which maintained its properties as a level of support of the Market. The battle has not been won yet however a first reaction confirmed the resilience of the level.

The technical requirement for the trend to return to the upside is the 887 units through which the 200-day moving average passes. So far no technical indicators have given a signal to buy, hourly charts have been relieved of sharp devaluation and day-to-day oscillators are neutral.

The positive scenario for the market would be a slow sideways accumulation at current levels as supply shows no signs of easing. On the contrary, the break of 850 points will lead the General Index to the low area of ​​last March, testing prices around 800 points. The verdict for the course of the trend next week is marginally in favor of the buyers under the condition of maintaining the level of 850 points, concludes Mr. Hatzidakis.

Dashboard

On the board now, Terna Energy jumped 8.49%, followed by Coca Cola with + 5.61%, Motor Oil with + 4.06% and Jumbo, Eurobank, Lambda, Piraeus, GEK Terna, Mytilineo and Saranti to close with gains of more than 3%. Viohalco and Aegean closed at + 2.5%.

Over 1% was the increase in Ethniki, Alpha Bank, PPC and Quest, OTE, PPA and Ellactor closed slightly higher, while EYDAP, IPTO, ELHA, Titan and Hellenic Petroleum closed slightly lower. OPAP closed with losses of 1.22%.