The Athens Stock Exchange General Index was coming off three consecutive sessions of declines, with cumulative losses of 1.98% and the banking sector index had experienced an equal number of corrective sessions, with cumulative losses of 4.75%. Many analysts, following the close of yesterday’s session, expected a rebound, even if only of a technical nature.
However, the international stock market sentiment shifted, and the Athens Stock Exchange was forced to follow the downward trend of international markets, albeit at a more moderate pace.
More specifically, investor concerns began last night on Wall Street and in the “usual suspect”—the technology sector—as worries resurfaced about the massive spending by “hyperscalers” on artificial intelligence and about who ultimately bears the cost. These fears outweighed the positive signs regarding demand provided by Micron and Qualcomm’s forecasts, with the Nasdaq tech index posting its fourth consecutive session of losses—for the first time since February. Shares of Apple and Microsoft also came under significant pressure following price hikes on their products.
In a counter-trend move last night, the small-cap Russell 2000 index closed at a new all-time high. The EuroStoxx 600 index also closed at a new all-time high yesterday.
The downward pressure spread this morning to Asia, where the South Korean Kospi fell 5.81% and the Japanese Nikkei dropped 4.09%, and later to Europe, with significantly milder losses.
Today’s session on the Athens Stock Exchange took place against this backdrop, with the ATHEX’s main indices trading primarily in the “red,” while trading volume at the close was relatively low (the lowest in the last four sessions), and the GD and DTR indices having recorded four consecutive sessions of decline, with cumulative losses of 2.07% and 5.25%, respectively.
Most analysts express clear concern, noting that “this barrage of announcements regarding share capital increases and bond issuances by listed companies, along with the ongoing raising of liquidity, is beginning to resemble an ‘overdose’ situation, and when things get out of hand, there are usually significant negative surprises lurk at the ‘end of the road.’”
According to a veteran market participant, “following the announcements of a rights offering of a 650-million and a 300-million bond issue by AKTR (+0.15% and a new 273-month high)—which this column had foreshadowed in a timely manner—it’s now the turn of a major listed company that, with the same ‘story’ (energy infrastructure) will consider the possibility of raising capital. If approved, the rights offering will take place in September and certainly after “the People’s Baths,” with all that this may entail for the future.
Beyond that, the generally weak performance of index-weighted bank stocks continued today, while analysts’ views remain sharply divided, as this column has previously noted.
According to the cautiously optimistic analysts, “it is considered only a matter of time before buyers return to bank stocks, as they will rush to price in the satisfactory first-half results that are expected.”
This column has compiled the announced financial calendars for the major banks, and barring any last-minute changes, PIR will announce its first-half results on July 29, followed by ETE, EUROB and OPTIMA; on July 31, ALPHA; on August 3, BOCHGR; and on August 6, CREDIA.
On the other hand, there is, of course, a more “cautious” school of thought, according to which “until the elections and perhaps even until the Thessaloniki International Fair, it cannot be ruled out that the market might ‘see’ the banks announce additional loans, as well as some other measures in favor of borrowers and depositors.” The most experienced foreign fund managers active on the Athens Stock Exchange have extensive experience with what happens in the country and during pre-election cycles and are ‘taking their precautions.’”
Beyond that, “rotation” continued today among large-cap stocks outside the banking sector—yet another indication that valuations, with very few exceptions, are “expensive,” and there are no “obviously cheap” stocks in sight that would catch traders’ attention.
With no sign of a turnaround in this negative trend, the overwhelming majority of mid- and small-cap stocks remain on the sidelines of trading and investor interest.
Meanwhile, according to the Hellenic Capital Market Commission’s report regarding net short positions exceeding 0.5%:
Arrowstreet Capital Limited Partnership maintains a net short position of 0.50525% in QLCO shares; JP Morgan Asset Management (UK) Ltd holds a net short position of 0.80012% in MTLN shares, AKO Capital LLP holds a net short position of 1.31857% in MTLN shares, Marshall Wace LLP, with a net short position of 0.71013% in MTLN shares, and Qube Research & Technologies Limited, with a net short position of 0.61894% in BYLOT shares.
Qube Research & Technologies Limited, as of June 25, increased its net short position in ADMIE from 0.45965% to 0.51337%.
Major European markets are trading in negative territory, with most traders adopting a wait-and-see approach, awaiting both today’s close on Wall Street and news from the Middle East.
Yields in the bond market are holding steady across all issuers. The yield on the U.S. 2-year Treasury note stands at 4.10%, while the yield on the 10-year note is at 4.39% (the yield on the 30-year note is at 4.88%). The yield on the Greek 10-year bond is at 3.536%.
The General Index fluctuated between 2,438.97 (-0.52%) and 2,454.01 points (+0.10%). At 5:00 p.m., it stood at 2,449.65 (-0.08%) and closed at 2,449.29 points, with daily losses of 0.10%.
Trading volume totaled 258.4 million, of which 35.7 million related to pre-arranged trades (MTLN, BYLOT, AKTR, REALCONS, CENER, ELHA, MOI, EYDAP, EUROB, ETE, BELLA, ADMIE, DEI, KRI, GEKTERNA, OTE), with ETE, EUROB, ADMIE, and DEI accounting for 42% of the total gross trading value.
Of the total turnover of 258.4 million, 212.2 million related to trades in FTSE 25 stocks.
Furthermore, today’s session was the last of the week, which broke the two-week winning streak, causing the General Index to post weekly losses of 1.08% and the banking sector index to post losses of 4%. Since the beginning of the year, the General Index has posted gains of 15.49% and the Banking Sector Index has posted gains of 19.2%.