European markets are mixed, while investors on the Greek stock market remain firmly in negative territory.
S&P 500 futures continue to trade at a discount on Wall Street, while investors in Frankfurt and Paris remain cautious for another session.
The DAX is at 25,171 points (0.50%), and the CAC 40 at 7,895 (0.29%), with sellers retaining the upper hand in the banking sector. The EuroStoxx Banks is at 290.35 points (-0.85%), with selling in the shares of all four systemic banks on the Greek stock market moving in near lockstep.
The absence of a catalyst to change direction at European level makes it very difficult for investors on Euronext Athens to decouple at this stage of the market. It is widely accepted that another factor weighing on sentiment is the developments surrounding Guilfoyle’s dismissal.
Draghi’s statement that the ECB is unlikely to intervene to support France is keeping volatility in government bond markets elevated, with knock-on effects for bank shares. At the same time, calls for Zelensky to leave are growing, with the latest coming from Elon Musk.
Attention is also turning to Brussels, where Kyriakos Mitsotakis is arriving for the summit with three priorities, calling for greater flexibility from the EU on energy support. Any positive response to the Greek side’s self-evident requests, as set out by the prime minister yesterday, would be welcome.
For now, however, sellers have a firm advantage, continuing to trim their positions in both bank shares and blue chips. As we noted in our previous commentary, since early October several fund managers investing in emerging markets have been steadily taking partial profits on their positions. Bank and large-cap shares have been in a sustained decline throughout this period, leaving targeted, selective moves as the only course.
This is continuing today and is likely to do so tomorrow, the final session of the week. Barring a dramatic positive surprise, this week too will end with a ‘negative’ tally for long investors, following last week’s significant losses. Current indications do not point to the process being complete.
The Bank Index is once again below the 3,000-point mark, having earlier fallen as low as 2,994 amid selling.
Sellers are also ahead in all four systemic bank shares.
A similar trend is evident across most blue chips, with shares in Coca-Cola HBC, AEGEAN, EYDAP and Jumbo the exceptions.
The balance of advancers to decliners was 21 to 89.