ECONOMY

Investors eyeing foreign markets

Investors may be in the mood to go bargain hunting this week, after the Athens stock market dropped 5.4 percent over the previous four sessions. However, international equity sentiment will continue to determine the direction of the local equities market. Market participants will be keeping an eye on the European Central Bank (ECB), which will be making its next rate decision on Thursday, with many expecting President Jean-Claude Trichet to increase the cost of borrowing by a quarter of a point to 4.25 percent, and to indicate whether further rate hikes can be expected. On the local scene, talk that banks are revising their three-year business plans and cutting profit targets is weighing on the sector. Selling in banks has been heavy, with many foreign portfolios reducing their holdings in the sector. Stocks such as index heavyweight National Bank, the country’s largest lender, have lost more than 4 percent in the last week.