The main index of the Polish stock exchange, WIG, ended Friday’s session with its highest record in history – after an increase of 0.2 percent. scored 68,387 points. After a 0.4% increase in the last 3.5 years, the mWIG40 mid-sized companies index was posted, and if we take into account its version including dividends, the record was also improved in this case.
– On the one hand, the WSE is favored by the strong performance of the main stock markets, on the other hand, the situation on the emerging markets works to our disadvantagewho are still burdened by price drops in China – commented Konrad Ryczko, DM BOŚ analyst, in an interview with PAP Biznes.
Great data from the American labor market
On Friday, the behavior of the main stock exchanges only moderately supported the gains on the WSE. The sessions proceeded without major changes, and the German DAX and the American S & P500 closed the trade at 0.1% and 0.2% respectively. Listed before the opening of the New York Stock Exchange data from the US labor market were clearly better than forecasts.
This, however, not so much caused the euphoria of stock market investors, but rather fears that the Fed will be forced to start withdrawing from extremely lenient monetary policy earlier.. This supported the US dollar, but weighed down on the stocks of a large number of companies, in particular those representing the technology industry.
As a result, the S & P500 managed to improve the record, but only symbolically. Meanwhile, despite the third session in a row, which ended with the record improvement by the WIG, also on the Warsaw Stock Exchange it was not possible to talk about hyperoptimism. The turnover on the WSE amounted to a modest PLN 812 million, and the turnover limit of PLN 100 million was exceeded only by Allegro shares (PLN 118.3 million).
The sell-off of the zloty masks the weakness of the WSE
Out of 15 industry sub-indices, only five ended the session positive. Thanks to a streak of good quarterly results, increases dominated the banking industry, which had the greatest impact on indices, but by more than 1 percent. sub-indices of the pharmaceutical and gaming industries dropped. After about 2 percent. Mercator and CD Projekt shares, popular among individual investors, were losing ground.
Meanwhile, next to the small width of the growing market The fact that the index records are accompanied by a marked weakening of the zloty is not a good omen for the economic situation in the coming months. Supported by good data from the USA, the dollar appreciated against the domestic currency by 1.4%. The zloty was also weakening against the euro, which went up by more than 0.7 percent.
This means that the expressed dollar or euro indices of the Warsaw Stock Exchange have not only not reached new records, but have even dropped (so from the point of view of global investors, Polish stocks are losing value). However, this tendency does not only apply to the last session – The WIG expressed in the US currency is already in a slight downward trend, and is more than 4% away from the peak from two months ago.
WIG index quoted in USD in the last 5 years. Source: BI Polska, Stooq.pl.
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From this we can draw a not very comforting conclusion, which is that The laborious increases in indices seem to be driven only by the maintenance of an extremely lenient policy by the NBP (in contrast to the NBP, the bank of the Czech Republic reached for rate hikes). Thanks to it, the zloty depreciates and domestic investors have a choice to flee from inflation, either by buying Polish shares or choosing foreign assets, thus selling off the zloty.
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