Significant gains across European markets, with the banking sector driving the Greek stock market’s outperformance.
De-escalation of political uncertainty in the US, expectations of increased investment in the energy sector and the pricing-in of a rationalisation of technology groups’ huge valuations were the main drivers of gains on European stock markets.
A dramatic bullish reversal in Wall Street futures provided the trigger for buyers to become more active across most European markets.
S&P 500 futures were up 0.91% at 7,647 shortly after 13:30; the DAX stood at 26,248 (up 1.48%), the CAC 40 at 8,137 (up 1.46%) and the EuroStoxx Banks at 283.27 (up 2.37%). At Euronext Athens, the bulls had an easy ride.
Initially cautious, like investors in Frankfurt and Paris, traders then became more active and, from 11:45-12:00, more coordinated, focusing mainly on the 4+3 banking stocks. The first anticipatory inflows began around the middle of yesterday’s session, continued at the start of today’s and gathered pace as trading progressed, once the upward bias in New York futures became apparent.
The EuroStoxx Banks stood at 283.27 and the banking index at 3,075. As we noted in our previous commentary, a break above 3,000 was significant. That level, as became clear yesterday, was being targeted as a reference point (potential support) for those who had taken positions at lower prices on Monday and Tuesday.
Turnover topped €155 million, with 23.8 million shares changing hands, including 19.4 million bank shares. Needless to say, a sizeable proportion of orders in the sector’s shares comes from so-called “fast money”, with all that may mean for volatility and risk through Friday’s close.
The value of transactions through pre-agreed orders was €26.48 million.
Buyers were ahead by a wide margin in Piraeus (10.16), National Bank (16.72), Eurobank (4.732) and Alpha Bank (4.736), with the screen turning green across almost all of the FTSE 25 large caps.