Wednesday's session on global stock markets passed in exceptionally good moods. Most of the main indices recorded significant increases, and the leading one was WIG20, which was stronger in Europe that day. Markets are reacting with increases to the expected reductions in interest rates in the US, which are forecast following the latest statements by the head of the US Federal Reserve.
Federal Reserve Chairman Jerome Powell's Tuesday comment that the outlook for the U.S. labor market continues to deteriorate has the market expecting the Fed to cut interest rates at both the October and December FOMC meetings. The dollar weakened against the euro and the Polish zloty, with the USD/PLN exchange rate falling by approximately 0.4%.
At the same time, raw materials gained and foreign capital, encouraged by the circumstances, flowed into the WSE in a large stream, as evidenced by the session turnover exceeding PLN 2 billion. The entry gate was, as usual, the largest banks, for which the news of the day were reports from the Sejm and the confirmed September inflation in Poland, as well as KGHM's shares, which were after the correction from the previous day.
With growth around 1%. indexes on Wall Street, increases of almost 2%. with which the indices in China and Japan ended Wednesday's session and the main indices in Europe, growing in most cases, apart from DAX and FTSE100, WIG20 ended the session with an increase of 2.01%. after the strongest session since September 8. It was the second best index in Europe on Wednesday, increasing by over 2.1%. French CAC40 (mainly thanks to the growth of over 10% of the LVMH concern after the publication of its results and the growth of other companies from the shelled goods industry on this wave, but also thanks to the recovery after the complete suspension of the pension reform until the next presidential elections).
WIG was 1.95% higher on Wednesday, while mWIG40 increased by 2.25% and sWIG80 gained 0.67%. The turnover, as mentioned, amounted to PLN 2.34 billion in the entire market, of which PLN 1.93 billion concerned WIG20 companies.
“After yesterday's session, a candle with a long lower shadow appeared on the WIG20 chart. Already in the second half of quotations, increased demand was visible on the Warsaw Stock Exchange, and today's session brings a continuation of this trend,” Przemysław Smoliński, an analyst at BM PKO BP, told PAP Biznes.
“WIG Banki is already slightly above the upper consolidation limit. Similarly, WIG20 is testing the same level, at 2,900 points. If these indices broke out of consolidation, it would indicate a continuation of the upward movement in the following sessions,” he said.
“At the moment, it is difficult to say whether in the event of this breakout we will see a return of the upward trend or only a corrective but stronger rebound. However, looking in the medium term, in the horizon of the next few sessions, if not a few weeks, we can expect a further upward movement, towards the peaks from August,” added Przemysław Smoliński.
In WIG20, the shares of Kruk (4.26%) and Kęty (4.26%) gained the same amount, and together with the rebounding share price of PGE (4.12%), they exceeded the level of 4%. The rebound in the energy sector was also visible in the shares of Enea (5.18%) and Tauron (7.40%) from mWIG40. The increase in Orlen's share price (2.54%) was also part of the theme of energy growth. Moreover, Orlen announced that it had submitted a non-binding offer to Grupa Azoty to purchase all shares of Grupa Azoty Polyolefins.
Banks also grew significantly, with their industry index gaining 2.24%. On Tuesday, the Sejm committee introduced orderly and legislative amendments to the bill, which is intended to increase the income tax paid by banks. The project, apart from increasing CIT, also assumes a reduction in the so-called bank tax. The project is therefore being proceeded, but for foreign capital the companies offer the greatest liquidity and market depth, which is why when shopping in baskets, their shares are preferred by international investors. The turnover on Wednesday was just over PLN 1,234 million on Pekao, and PLN 293 million on PKO. However, it was Orlen that was most frequently traded on the WSE that day, with exchanges worth PLN 354 million. The second in this respect was KGHM (2.15%), which returned to growth with a turnover of PLN 255 million, amid rising copper prices. Only the CCC rate was below the line in WIG20 (-2.03%).
On the broad market, the largest increase was in the quotations of Coal Energy (29.83%), a mining company with Ukrainian origins, which signed a memorandum of cooperation with two Albanian companies belonging to the company's Romanian partner, which includes the development of mining projects in Albania.
