Greek Bank Stocks Rise as European Stocks Fall
Jittery investors led to a fall in the European markets as a $61 billion bailout was the hallmark of the day’s business news from Greece.
Investors have been looking for a assurance that the debt ridden Greek economy would not default. “It’s a short-term fix and it doesn’t address the long-term problems of Greece or Europe,” said Bruce A. Bittles, chief investment strategist at Robert W. Baird & Company.
Eurazeo SA fell by 4.1% basis Les Echis reports that the company is contemplating a 500 million Euros rights issue while National Bank of Greece gained by 5.2%. The Stoxx Europe 600 Index slid 0.1 percent to 269.36, while UBS AG gained 3.1 percent after the Swiss bank reported the highest quarterly earnings in almost three years.
The news from Walls Street was that the Dow Jones had a flat trading with the indices rising by 24 points only. The S&P was up by 0.25 percent while the Nasdaq just about managed to move into the positive territory towards the end of the day.
Mr. Philippe Gijsels, Head of Research at BNP Paribas said that there was no momentum on the shares as a result of the Grrek bailout news as it was already expected. Unicredit AG’s chief strategist, Thorsten Weinelt, today warned that the outlook for European stocks will “slowly but steadily” worsen. With the UK budget deficit reaching 11.8% of the GDP, this prediction looks very likely. However, there is hope of a recovery or positive sentiment in the market with the results of the quarterly performance of American companies like Google., GE, Bank of America etc due this week.
In Athens, market reaction was more dramatic. The composite index rose 4.4 percent, as financial shares — which came under heavy selling pressure after Moody’s cut its ratings on five Greek banks last week — soared 7.6 percent.
Ben May of Capital Economics says tat the rescue plan would ensure that Greece”is able to its financial needs over the next year or so, but it does not guarantee Greece’s long term solvency.”
