Greek stocks may test the 1,600 point resistance level on Monday after buying momentum boosted the general index 3.5 percent percent last week on talk that Brussels may soon approve a definite solution to the country?s debt crisis.
However, selling pressure could come from abroad after sell-offs in foreign markets as protests seeking to overthrow Egyptian President Hosni Mubarak unsettle global investors and push oil prices up.
The Athens bourse?s benchmark general index ended at 1,591.23 points on Friday, the highest level since October.
Among the solutions being looked at in Brussels is financing a Greek government debt buy-back program, Finance Minister Giorgos Papaconstantinou told Dow Jones on Friday.
Under the scenario being discussed, the European Financial Stability Facility (EFSF) would borrow from the international markets and lend money to Greece. With that money, Athens would be able to buy back Greek government bonds thought to be held by the European Central Bank at an interest rate significantly below that which Greece currently borrows at. ?The market is discounting a positive solution for Greece. Buying from foreign players has picked up recently,? according to a broker.
Buying in high dividend stocks, such as gambling company OPAP, may carry over this week after the government announced a corporate tax cut, making annual returns more attractive. The government plans to cut the tax rate on corporate earnings to 20 percent, from 24 percent, as of this year while also lowering the tax applicable on distributed profits.