The last session of the week brought a continuation of declines on the Stock Exchange (WSE). The Warsaw Stock Exchange Index (WIG) lost over 1 percent. During the week, the discounts on the major indexes exceeded 4 percent – the highest level in a year. According to analysts, after such a scale of sell-off, some stocks seem attractive, but a correction in the core markets remains a high risk.
– Friday brought a worsening of the already disastrous moods on the Warsaw Stock Exchange. The ending week was the worst for WIG in a year, when in November the main index lost 7.83 percent – said DM BNP Paribas Bank Polska analyst Szymon Nowak.
Declines on the Warsaw Stock Exchange
While looking for the reasons for the weakness of our market, the analyst points to the weakness of the zloty and the flight of investors towards the dollar. – The weakness of the Warsaw trading floor in recent days stood out against the core markets, where the sentiment remained slightly positive. The incoming results from companies also do not justify such a scale of the discount. This allows us to look for answers in the devaluation of the zloty and the flight of foreign investors towards the dollar, he said.
As for the near future, according to Nowak, the main risk is the core markets, where a correction may occur after a good period, blocking a possible rebound on the WSE.
– After such a scale of the sell-off, some stocks seem attractive, but at the moment a potential correction in the core markets after a few good weeks remains a big risk. Even a small sell-off in the US or in Europe at the beginning of next week could weigh heavily on the Warsaw market, which will try to raise after the falls this week. Considering that the above-mentioned factors will not change in the near term, the mood at the beginning of next week may remain subdued – the analyst said.
The WIG20 ended Friday’s trading with a decline of 1.02 percent. to 2,248.18 points, the WIG decreased by 1.04 percent. up to 69 415.67 points Indices representing companies with medium and smaller capitalization lost respectively: mWIG40 1.04 percent. up to 5430.55 points and sWIG80 1.22%, reaching 20,722.74 points.
On a weekly basis, losses of the main WSE indices are the highest since last November. The WIG20 fell the most in the week ended by 4.67 percent, while the WIG fell by 4.35 percent. and mWIG by 4.5 percent.
The situation on other exchanges
At the close of trading on the WSE in Europe, most stock exchanges were moderately declining, and the sentiment clearly worsened after information from Austria, which intends to introduce a full lockdown from Monday, also for vaccinated persons. This gave rise to speculation that other European countries could follow Austria, as the epidemic situation in most of them is equally serious.
During the closing of the WSE, DAX fell by 0.42 percent, the French CAC 40 fell by -0.56 percent, and the British FTSE 100 lost -0.5 percent.
The main US indices ranged from -0.65 (DJI) to +0.55 percent. (Nasdaq 100).
WIG – Friday session
In terms of sectors, clothing companies fell the most during Friday’s session (-3.18%), which may be related to the worsening epidemic situation in Europe. Stocks of food companies (-2.36 percent), chemical companies (-2.14 percent) and banks (-2 percent) also clearly lost.
Among the rising sectors, companies from the gaming industry stood out, with the index growing by 3.5 percent. WIG Media (1.36%), WIG Górnictwo (0.96%) and WIG Leki (0.77%) also gained.
According to Szymon Nowak, “the biggest burden for the Warsaw Stock Exchange not only today was the banking sector, which lost 6 percent in the last five days, including 2 percent today”. – Much from the WIG result during the week was also subtracted by mining (almost 10 percent), where investors’ eyes were particularly focused on KGHM, which lost 9.6 percent, and JSW, which fell by 12.3 percent, hitting the fifth decline week with row. The fuels were also clearly doing poorly this week, he said.
Among the companies from WIG20, whose shares were strong for most of Friday’s session, CD Projekt can be distinguished, which closed at 4.22 percent. above Thursday’s close, with a turnover exceeding PLN 86 million.
In the second part of the session, PGNiG shares started to climb, which finally ended the day at 3.88%. plus.
Mercator and JSW also gained (1.2 percent each), and a minimum of less than 1 percent. KGHM and Allegro increased.
Clothing companies and the financial sector dropped significantly throughout the session. The leader of the decline turned out to be CCC, whose shares lost 5.57 percent. and weak second session in a row of PZU, which lost 4.45 percent.
Among the medium-sized companies included in mWIG40, 6.5% is worth noting. increase of 11 bit studios with PLN 12 million of turnover. After yesterday’s session the company released the results for the third quarter of this year, which at the level of net profit were better than analysts’ forecasts.
3.4 percent after yesterday’s strong sell-off, mBank shares gained with the highest turnover in this market segment reaching PLN 37 million.
The leaders of decreases from mWIG40 were Amica (-4.7%), Amrest (-4.65%) and Ciech (-4.62%).
In the case of the smallest companies entering the sWIG80, after lower than expected results for the third quarter, Wielton shares fell sharply (-14.47%), and the turnover reached PLN 10.4 million.
Over 8.7 percent On the other hand, ML System gained, as the rate reached the upper limits of the consolidation that was underway since mid-October.
Main photo source: Shutterstock