Concerns have returned to the Athens Stock Exchange this time, as the latest inflation data reignited fears that the European Central Bank will move ahead with more aggressive policy tightening moves.
In particular, the General Index registers a drop of 0.61% to 805.51 units, while the turnover is at 30 million euros and the volume at 9 million pieces. Losses of 0.46% were recorded by the FTSE 25, at 1,933.69 points, while the banking index fell by 0.69% at 494.34 points.
The latest data on consumer prices disappointed the market, as Eurozone inflation came in at 8.6% in June, up from 8.1% in May and higher than estimates of 8.4%. And this means that the ECB will have to take immediate decisions to control inflationary pressures, which will also lead to an increase in borrowing costs.
The ECB, however, has a difficult – if not impossible – equation, as it tries on the one hand to contain the 4-decade high inflation and on the other hand to stimulate the pace of global economic growth, with the first “recessionary Cassandras” coming to the fore. So until the growth/inflation mix improves, markets are likely to remain volatile as investors turn from inflation concerns to recession fears.
As long as the markets expect an increase in borrowing costs, combined with a slowdown in economic activity, buying movements will be cautious, as the outlook will be more conservative. After all, the rise in interest costs for listed companies raises the bar for the objectives of mixed corporate profitability, in order to achieve the servicing of the repayment of new bond issues.
On the board now, OTE is losing 3.44%, due to a dividend cut, with PPC, Eurobank, Titan, Sarantis, Piraeus and PPA following with losses of more than 1%. Mytileneos, Jumbo, EYDAP, ADMIE, Hellenic Petroleum, Terna Energy, Biohalco, Quest, Aegean and Ethniki are moving slightly lower.
On the contrary, Coca Cola supports the market with +2.64%, while GEK Terna and ELHA follow with a rise of 1.40% and 1.06% respectively. Motor Oil, OPAP, Lambda and Alpha Bank are moving slightly upwards. Ellaktor is unchanged.