German bomb "destroys" the ASE

Trichet let the markets down but...

 

The ASE could not avoid the new collapse since now the question of the country’s exit from the Eurozone is a perspective risk or a formal danger from Europeans (Dutch Prime Minister Routte and German Finance Minister Schauble), since officials of the OECD indicate that the passing of bonds is stuck at 75%, while at the same time recession statistics announced in the last semester is even higher, reaching the most unrealistic 8%.

The ASE general index literally collapsed with a reduction of 4.59% at 866 units and once more banking shares dissolved. It is characteristic that National Bank fell by more than 10%, closing with barely over 3 euros, while Alpha Bank’s fall reached 12.5%, Eurobank and Piraeus Bank lost over 8%.

Generally, 91 shares showed a reduction, against 43 which showed gains, while turnover was around 55 million euros. 10 year-bond spreads rose even more, reaching 1825 units.

At the same time, and given that ECB head Jean Claude Trichet did not surprise us positively by cutting euro interest rates – principal remains at 1.5%- initial momentum shown by European markets weakened out, and the index in Frankfurt while the ASE meeting was drawing to a close, was but 0.5%.

Within this backdrop, it was reasonable that the Euro was weakened, after a morning drive to $1.41, barely keeping above the $1.40 barrier.