Greek stocks rose on Friday bringing gains for the first week of March to almost 9 percent, as rising European markets and news of Greece’s 10-year bond auction being met with strong demand boosted sentiment. The Athens bourse’s benchmark index gained 1.66 percent to 2,028.06 points.
The blue chip FTSE/ATHEX 20 index advanced 2.17 percent to 1,040.04 points, while banks added 3.10 percent.
National Bank outperformed, rising 4.39 percent to 15.45 euros and peer Alpha moved ahead 3.24 percent to 7.33 percent.
Bank of Cyprus rose 3.45 percent to 4.80 euros and Piraeus Bank ended at 6.68 euros, up 2.77 percent.
Turnover fell to 159.2 million euros from 201 million in the previous session.
FTSE Banking 2,319.55 (+3.10%)
FTSE 20 1,040.04 (+2.17%)
FTSE 140 2,352.27 (+1.96%)
FTSE International 2,755.72 (+2.00%)
FTSE Liquid Mid 2,146.15 (+0.96%)
FTSE Mid 40 2,424.97 (+0.74%)
FTSE SmallCap 80 372.89 (+0.11%)
General Index 2,082.06 (+1.66%)
Total Performance DG 2,740.21 (+1.65%)
The dollar weakened against most other major currencies after a key US monthly jobs report beat expectations, raising hopes for a sustained economic recovery that fueled risk taking. The euro rose to $1.3621 around 2200 GMT, up from $1.3580 late Thursday.
Against the Japanese currency, the dollar rose 90.28 yen from 89.10 yen on Thursday.
Traders deserted the safe-haven dollar after the Labor Department reported the US economy lost fewer jobs than expected in February and the unemployment rate held steady at 9.7 percent.
The department said non-farm payroll employment fell by 36 000 jobs, surprising most analysts who estimated about 67 000 losses amid severe winter weather that crippled regions of the country.
Most economists had expected the unemployment rate to rise to 9.8 percent from 9.7 percent in January.
“Thanks to the better than expected US non-farm payrolls report, the sun is shining brightly on the financial markets,” said Kathy Lien at Global Forex Trading.
“The improvement in risk appetite helped to drive currency traders out of the safety of US dollars and back into higher-yielding and riskier currencies,” she said.
“Forex traders even bought euros and sterlings despite problems in the hopes that a stronger US recovery will reduce risk in the rest of the world.”
**** The Greek economy shrank by 0.8 pct in the fourth quarter of 2009, on a quarterly basis, Eurostat said on Thursday. The EU executive’s statistics agency, in a report, said the Eurozone economy grew by 0.1 pct in the fourth quarter of 2009.
On an annual basis, Greece’s Gross Domestic Product shrank 2.6 pct compared with the fourth quarter of 2008, while Eurozone’s GDP fell by 2.1 pct and the EU-27 the GDP was down 2.3 pct.
**** Greece sold on Thursday a €5bn 10-year syndicated bond priced at mid-swaps plus 300bps. The demand for the issue reached €15.5bn. Public Debt Agency (HPDA) Chief Christodoulou said that they are compensating the markets to re-enter, and that Greece may proceed with one or two more syndicated issues before it resorts to regular re-openings of benchmark bonds. The move was more or less expected, while it positive the fact that the markets are open for Greece.
*** ECB president Trichet commented that it would not be appropriate for IMF to be a supplier of help to Greece, other than technical. That comes as a respond the Greek government’s consideration of the IMF option. Trichet also said that Euro area countries will take coordinated action if needed, and that Greece is in a better position now, after the extra measures. An ECB official said that the extra measures were well beyond what ECB asked for. A Government official said that Greece expects from EU a clear expression of solidarity and confidence, and not direct financial support
**** The Greek Parliament on Friday passed a draft bill for harsh austerity measures announced by the government, including sweeping public-sector wages cuts and hefty hikes in indirect taxation. The bill was passed with the support of ruling PASOK and the nationalist, right-wing party Popular Orthodox Rally (LAOS). The Communist Party of Greece (KKE) walked out of the vote and there was a verbal exchange between PASOK spokesman Christos Papoutsis and Deputy Finance Minister Filippos Sahinidis.
The package of measures had been approved by the cabinet on Wednesday to help meet a target of reducing the country’s fiscal deficit by four percentage points in 2010. Greek Finance Minister George Papaconstantinou on Friday said that no further measures would be required if these were fully implemented as envisaged.
In statements on Wednesday, Papaconstantinou said the measures offered a clear response to the European Commission and to markets.He admitted that they were patently hard but necessary because they determined the country’s ability to borrow in capital markets. He added that Greece was doing what it has to do and that talks with the European Union and its partners would continue in the coming days and weeks to ensure the necessary support. He left the door open, however, for Greece to refer to the International Monetary Fund if the country did not find the necessary EU support.
Papaconstantinou said the measures announced by the government was all it could do for 2010, while the government was taking additional permanent measures on the request of the European Commission, IMF and the European Central Bank and containing, or lowering payroll cost in the public sector. He added that payroll cost in the public sector has risen by 40 pct in the last five years. Papakonstantinou said the measures in the incomes policy were of permanent nature and would be implemented as long as the country remained under the supervision of the EU.
The government will examine any corrective moves after the country would be in a position to exit the EU’s supervision procedure and will introduce a new payroll system in the public sector, Papaconstantinou said. All cutbacks in the incomes policy will be introduced retrospectively from January 1st.
The Finance minister said he expected the Greek economy to shrink by more than -0.3 pct -projected in the state budget- but below forecasts made by the EU Commission, the European Central Bank and the Bank of Greece (of a recession between 1-2 percent).
Papaconstantinou said tax revenues in February were short of budget targets because of a series of strikes in the audit mechanism.
**** An Athens court has placed a freeze on the transfer of personal assets belonging to Pavlos Psomiadis, the president and managing director of insurance group Aspis, which shut down last year. The court order also forbids Psomiadis’s family members from being able to sell their assets, including property in central Athens locations, as investors who bought bonds in the company have taken legal action in a bid to get their money back.
**** Many hotels in popular holiday destinations across Greece will be closed during Easter this year due to low demand locally and from abroad. Hotel owners have also cited the early Easter break this year and the coinciding dates between the Orthodox and Catholic holiday as hurting demand in the sector.
“It is often cheaper for a hotel to remain shut rather than opening for business,” said one source within the industry.
Hotels on the islands are likely to feel the pinch more than their peers in winter destinations as the likely cool weather expected during Easter, April 4, will keep Greeks away from beach resorts. Other industry sources said hotel occupancy rates at the start of April will be an initial sign of how local consumers react to the government’s austerity measures.