Athens Stock Exchange: In the midst of recession and inflation

Athens Stock Exchange: In the midst of recession and inflation
Athens Stock Exchange: In the midst of recession and inflation

A mini sell-off was suffered on Friday Athens Stock Exchange, with investors making large liquidations, driving the market to its lowest point since July 15. The broad losses were caused by aggressive interest rate hikes, escalating tensions in Ukraine and, above all, heightened concern about the risk of recession.

It is no coincidence that the wave of turmoil spread to all international stock markets, from Europe to the US. The same time, government bond yields soared at a multi-year high (more than 4.6% in Greek), while the euro fell to a new 20-year low ($0.97). Negative signs also in the commodity market (oil, gold).

In more detail, on the Greek stock exchange, General Index fell sharply by 2.39% to 798.11 points, down 19.5 points from Thursday’s close (817.61 points). The arc of daily fluctuations was set at 24 points (from 795.76 to 819.59 points), with trading turnover close to 61 million euros.

Wave of pressure, at -4.6% the weekly change

Athens Avenue “measured” losses of 4.6% during the week, with the General Index “missing” the supports of 800 units for the first time since July 15, which confirms negative investor sentiment and reluctance taking unnecessary risk.

Similar – if not worse – is the “picture” in the international markets, which are troubled by the aggressive interest rate increases of the major central banks (Federal Reserve, EKT, BoE, etc.). However, this strategy, which aims to curb persistently high inflation, comes at a “heavy” price. The development. The tight monetary policy is dealing with the wave of appreciations, but at the same time it is undermining the prospects of the economy. As a result, the “clouds” of the coming recession thicken significantly. The situation takes on an even more urgent nature in the Eurozone, taking into account the ongoing energy crisis and the escalation of the war in Ukraine.

In this context, the yield on the -always sensitive- 10-year bond of Greece jumps above 4.6% (+14 basis points compared to Thursday), reaching close to the levels of the 2017-2018 memorandum period. at the same time, spreads, i.e. the deviation in relation to the yield of the German bond, shot up to 256 basis points.

The picture is equally negative in the rest of Europe, with the yield on Germany’s 10-year bond exceeding the 2% barrier (+10 basis points), for the first time since the distant 2011. It should be noted that a few months ago, namely the 2021, the German yield was hovering in negative territory.

For its part, the euro is down almost 1% (-0.95%) and slumps to $0.9741, breaking yet another negative record (the previous 20-year low was $0.98).

Taking all of the above into account, the medium-term trend remains sideways-downward, with the General Index consistently lagging behind the 200-day exponential moving average (EMA-200). The losses since the beginning of the year are determined to be close to 11%.

“Black” the picture in the international markets

In international markets, the pan-European Stoxx 600 is down -2.00% and 391 points, as Germany’s DAX is down 1.73%, France’s CAC 40 is down 2.51% and Italy’s FTSE MIB is down 2.05% . In London, the FTSE 100 lost 2.15%. On the other side of the Atlantic, the Dow Jones is down nearly 400 points and is sinking to its lowest point of the year.

As for the oil market, prices are putting the brakes on the upward streak and are returning to the $80 levels, fearing a recession. In particular, WTI contracts slipped to -5.20% and $79.15 per barrel, while Brent contracts limited to -4.48% and $86.41 per barrel. The price of gold, finally, stands at -1.70% and 1,652 dollars per ounce.

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23.09.2022, 11:29
UPD: 23.09.2022, 17:31

The article is in Greek

Tags: Athens Stock Exchange midst recession inflation

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