Banks and the stock market

Above 830 units, the General Index returned to the Athens Stock Exchange and to the highest levels since June 24, thanks to the outperformance of banking stocks, as well as the support of selected blue chips. The domestic market was also boosted by the positive climate in Europe, at a time when investors were focusing on the Fed meeting.

In more detail, as far as the statistics of yesterday's meeting are concerned, the General Index registered a gain of 0.67% and closed at 834.85 points, while the turnover amounted to 41.04 million euros. According to Depolas Investment Services, the upward limit for the A.A. estimated in the region of 850-860 units at the present stage.
The high-cap index strengthened by 1.01% to 2,010.33 points, while the mid-cap index closed with an increase of 0.28%, at 1,358.29 points.

Among the non-banking blue chips, Coca-Cola stood out with gains of 2.59%, followed by Jumbo and OTE with an increase of more than 1%. On the other hand, Lamda Development, ADMIE and Ellactor recorded a drop of more than 2%, while a drop of more than 1% was recorded by Quest, Aegean, GEK TERNA, Saranstis and Motor Oil.

The banking index outperformed, rising 2.68% to 508.05 points, with Alpha Bank increasing by 4.27%, Piraeus by 2.55%, Eurobank by 2.40% and National Bank by 1.
Axia Research appeared bullish on the outlook for banking stocks, as it believes that second-quarter results - which start to be announced this week - could be the catalyst for a new upward movement in the AXA board, at the moment whose valuations are very attractive compared to European banks.
Overall, Axia expects strong results from the systemic banks which will be supported by the good performance of the Greek economy, which is still enjoying several headwinds, unlike many other economies internationally. He expects very strong disbursements, 5x higher y-o-y, very low NPE formation, with all systemic banks reporting single-digit NPE ratio for the first time in over a decade, and significant one-off items, e.g. sales and trading profits, which will boost capital ratios.
Regarding the A.A. and the markets in general, as commented by Dimitris Tzanas, investment manager at Kyklos Khmeratistiraki, the international stock markets are moving nervously, as the possibility increases for developments that may lead to a recession in 2022, especially in Europe, as the energy crisis affects it almost exclusively, while the general rise in interest rates is expected to hit several of the over-indebted emerging economies, especially those with high short-term external debt (Tunisia, Argentina, Pakistan and of course Ukraine).

With the above data, in the Greek Stock Exchange, transaction depreciation is the dominant feature, with transactions hardly reaching 50 million euros. However, the change in monetary policy on the tighter side favors banking figures, with credit expansion already registering a noticeable improvement in 2022, as will be certified by the upcoming announcements for the second quarter.

However, with uncertainty and geopolitical volatility high, the investment community does not consider it the time for a vote of confidence in equity values, with the General Index unable to move towards 850 points, having nevertheless certified the strength of the 800-point support, concludes Mr. Tzanas. All this opens up new opportunities and gives an understanding of the big picture.
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