Greek Rally Derailed as Austerity Undermines Valuations
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The four-month rally in Greek shares that turned the ASE Index into the most expensive national benchmark in western Europe is ending as lawmakers squabble over austerity measures needed to ensure the flow of bailout funds.
Greek stocks tumbled 8.3 percent last week, the biggest decline in five months. The ASE had surged 88 percent from a two-decade low on June 5 through Oct. 22 as Public Power Corp. and Eurobank Ergasias SA more than tripled, pushing the gauge’s valuation to 51 times estimated 2012 earnings, data compiled by Bloomberg show. That was the highest on record and compares with the five-year average of 11.7 times projected profit.