ECONOMY

Banks drive the market

Euphoric heavyweight bank stocks propelled the the Athens Stock Exchange (ASE) general index back to the levels of September 2000 last week. Better-than-expected 2005 results of Piraeus Bank, which posted a 106 percent rise in net profit, catapulted the share price 17.9 percent (or 3.80 euros) higher in five sessions. The general index closed at 4,245.14 points on Friday, 3.13 percent higher than a week earlier, with the banking index gaining 7.63 percent. But chemicals outperformed, surging 8.25 percent higher. The blue chip FTSE/ASE 20 index rose 4.32 percent to 2,346.87 points, the FTSE/ASE Mid-Cap 40 added 3.29 percent and the FTSE/ASE Small-Cap 80 gained the least, 1.29 percent. A number of analysts are expressing fears of a sharp correction as the gains of a number of stocks are not in line with their results or business outlooks. They note that despite signs of overheating, the number of stocks returning to the heyday levels of 1999 and reaching new year-highs is decreasing; the explanation lies in that decliners are outnumbering winners. Characteristically, they point out, now the number of stocks at 5.5-year highs has fallen to 50 from 140 when the general index was still at 4,000 points. Other analysts take the view that the index’s next test will be at the 4,300-point level, particularly in view of the scheduled announcement of results by National Bank on Tuesday, estimated to post a rise of about 150 percent.