ECONOMY

Volatility seen as transient

Greek stocks proved more volatile than usual last week, and were pulled south on the one hand by the continuing imported jitters over US subprime mortgage risks and oil prices, and supported on the other by the better-than-expected first-half results announced by domestic banks. The week began with imported pressures prevailing for a third consecutive session, leading the Athens Exchange (ATHEX) general index through the 4,900-point floor to close at 4,846.64. Mid-caps fared rather better, as pressures appeared to be mainly directed at blue chips. The picture was reversed on Tuesday, with resurgent blue chips and mid-caps leading the index 1.46 percent higher. Volatility reached a peak on Wednesday, when the index fell below 4,800 points in mid-session trading. It closed at 4,842.65 on Friday, down 1.20 percent for the week. Only three of the 17 sectoral indices – commerce, raw materials and travel-entertainment – stayed afloat, while utilities led decliners by plunging 5.83 percent. Analysts on the whole tend to consider the short-term trend unclear, as markets, despite the upheavals, have not lost their positive momentum. They argue that experience from previous corrections in global markets since the rebound that began in March 2003 were brief and counterbalanced by corporate profitability. Most express the view that the current correction will create more attractive valuations and renew opportunities for investors. Even the pessimistic scenarios foresee strong volatility which will abate after September, as corporate fundamentals remain strong.