ASE walks in line with Europe

The Athens Stock Exchange (ASE) seems to be vindicating those that banked on January being a month of gains. Powered by blue chips, the ASE is maintaining an upward momentum that is also pulling middle capitalizations into the game. Indeed, intra-session correction has taken place in recent days; the market typically opens with losses but closes with gains – a sign of a dynamic market that can absorb supply and continue at higher prices. Of course, those who are more circumspect will point out that the quick upswing coincides with a pre-election atmosphere. But is it possible now for the stock market to rise for political reasons? Could it be that domestic interests lie behind the supposed growing interest of foreign investors? Perhaps some are trying to manipulate the market in various ways. But there is a litmus test: the performance of other bourses. Obviously, the ASE’s performance cannot differ all that much from others in the eurozone. Even with Greece’s outdistancing of European partners in terms of the GDP growth rate, stock market gains cannot be that much greater. And it is not so much the performance of the market as a whole that is significant as the comparison on a sectoral basis. We cannot expect, for instance, Greek bank stocks to perform much more impressively than other European banks. Besides, according to all available data, the weight of foreign institutionals in the ASE has increased due to the absence of retail investors. We can, therefore, expect the Greek market to move more or less in tandem with the rest of Europe. Any divergence is either suspect as manipulated or coincidental and transient.