Cyprus stocks remain under pressure

Renewed pressure in international markets, starting from a 4.4% decline in the Shanghai Index, which was followed by early Thursday weakness in Europe forced Cypriot titles sharply lower.

Asian investors marked Chinese stocks lower on fears that the Peoples Bank of China may be forced to accelerate the pace of the Chinese yuan appreciation as the central bank attempts to cool the economy. China is widely accused by the west of artificially keeping the value of its currency low. EU’s Almunia and ECB’s Trichet will travel to China next week to discuss currency issues after seeing EURCNY appreciating and China’s trade surplus with Europe ballooning over the past year. Rising Chinese inflation rates argue for a higher CNY and tighter monetary conditions, note BNP Paribas analysts in a research note.

Europe opened broadly lower on Thursday as oil prices and the euro remained at close to record highs. The selling wave hit Cyprus, with Bank of Cyprus breaking an important chart support at EUR 11.56, which led the stock to drop to a new low of EUR 11.24. Bargain hunters stepped in at the lows and by lunch time the stock had recovered to EUR 11.42.

The same pattern was also seen on Marfin Popular Bank shares, which after breaking the 200-day moving average at EUR 9.05 touched a session low of EUR 8.90, but then recovered to EUR 9.08 by midday trading.

Hellenic Bank shares, which initially fell to EUR 4.56 recovered to 4.64 by midday trading. With US markets closed for the Thanksgiving Day holiday, analysts expect activity to die down by afternoon.