Athens - Greece's battered banking stocks rebounded on Thursday after a three-day rout that wiped 63 percent from their market value, helping the broader Athens market to recover.
Investors were picking up cheap shares after what was essentially a crash.
The Athens bourse's banking index reversed early losses and was 13 percent higher by mid-morning with all of its constituent stocks in positive territory. They were led by a nearly 22 percent jump in National Bank, Greece's largest lender.
The banking index had earlier dropped 3.6 percent. Alpha Bank reversed a 26 percent early loss to trade 7 percent higher.
“The market seems to have found an equilibrium after its deep plunge. Buyers are having the upper hand despite the negative start, and this has helped sentiment across the board,” said Takis Zamanis, chief trader at Beta Securities.
The broader market - of which banking stocks make up around 20 percent - was up 3.7 percent. Only one of the 25 stocks in the blue-chip index was trading lower, engineering contractor Metka.
Telecoms provider OTE was up 5.7 percent despite posting a second-quarter loss due to a voluntary redundancy scheme and a weak performance by its foreign operations.
Greece's banks need to be recapitalised after a flight of euros from deposits for most of this year and mounting bad loans. But that will hurt existing shareholders, when it comes, by diluting the value of their holdings.
Athens and its international lenders share the view that banks must complete their recapitalisation by the end of this year and avoid a haircut on large depositors, Greece's finance minister said on Wednesday.
The European Union estimates the recapitalisation may cost between 10 billion euros and 25 billion euros.
“The key determinant for bank values remains the outcome of the coming comprehensive assessment by regulators,” said analyst Nick Koskoletos at Athens-based Eurobank Equities.
“Trading is expected to remain highly volatile in the interim.”
REUTERS