ECONOMY

Sentiment is still fragile

After a bearish and gloomy first quarter of the year, the Athens Exchange (ATHEX) recovered part of earlier losses in the first week of April. The benchmark index closed at 4,105.72 points on Friday, 3.32 percent higher than a week earlier. Nevertheless, investor sentiment remains volatile and the market vulnerable to imported liquidations, while anxiety persists on the state of the leading world economies and everyone awaits the announcements of the first-quarter results of bellwether giants. Citigroup is scheduled to report on April 18, after Alcoa today. In this light, the US Federal Reserve meeting on April 30 takes on special interest, as by then there will be an overall picture of the results of US companies and banks which will influence the Fed decision whether to continue with interest rate cuts. The initial estimates for Greek listed firms’ first-quarter results point to a slowdown in profitability growth. Nevertheless, net results totaled 11.3 billion euros, the highest sum ever in the history of ATHEX. The market appears to be discounting a fall in profitability in the order of 15 percent, which is seen as resulting from higher energy costs, a slowdown in the growth of or even compression of banks’ net rate spreads, and the loss of extraordinary incomes from the steep fall of markets in the first quarter. ATHEX last week was among seven founding members of Link Up Capital Markets, a new consortium of European depositaries, which will be active in the cross-border clearing of stock market transactions. The seven members of the consortium, which will be ready for operations early next year, have a combined capitalization of -12 trillion.