Clear increases on the WSE returned, but not for Orlen. The price is falling for the fourth session in a row
After several weaker sessions, WIG20 returned to significant increases, thus translating into a good performance of the broad market index with moderately positive behavior of medium and small companies. The driving force behind WIG20 growth was primarily banks, but also the LPP exchange rate. Orlen's share price is weak.
This time, the increases in the main stock exchange index in Warsaw were clearly greater than those observed on the core stock exchanges, unlike the previous day, when WIG20 did not benefit sufficiently from the strong increases on Wall Street. This time in the US, the S&P500 was gaining only 0.2% when the session in Poland ended, while the Nasdaq was slightly below the mark. Markets in Europe performed better, with DAX gaining 1% and CAC40 0.9%. and FTSE100 0.8%.
Thus, the WIG20 increased by 1.46% at the end of the session. turned out to be one of the strongest in Europe, second only to the index of the small stock exchange in Prague. Indexes in Moscow performed very well again, and Wednesday's overall increases can be seen as investors' play for a new attempt to end the war in Ukraine.
What may have drawn attention was the information about a breakthrough in the peace talks, in which Kiev and Washington agreed on the key terms of peace that will be presented to Russia. Moreover, it appears that Ukraine is capable of making greater and greater concessions, such as reducing the size of its armed forces.
Increases in WIG20 translated into an increase in WIG by 1.25%. In the second line, mWIG40 gained 0.89 percent, and sWIG80 finished the session with problems by 0.34 percent. higher. This time, the turnover on the broad market was estimated at PLN 1.99 billion, of which PLN 1.67 billion concerned WIG20. The previous day, higher turnover was the result of periodic rebalancing of portfolios from MSCI indices, which this time included no changes regarding Polish companies.
“WIG20 is in an interesting place. On the one hand, over a week ago it broke out of short-term consolidation, thus ending previous increases and hopes for an even stronger upward move. But on the other hand, literally a session later, it stopped at the medium-term upward trend line and since then, i.e. for over a week, it has been consolidating between these two limits,” Przemysław Smoliński, an analyst at BM PKO BP, told PAP Biznes.
In his opinion, there are currently no investment signals, so you should be patient and wait for what the next sessions will bring.
“We are waiting for what will happen on WIG20. We are still above the medium-term growth trend line, so we can still return to growth. However, at the moment there are no specific signals for this. Of course, the situation in the United States will be important, where we have also been dealing with a correction for some time,” he said.
On Tuesday, since the beginning of the session, the strongest sector index was WIG Clothing, which gained 2.88% at the end. This was mainly due to the increase in LPP shares (4.8%).
Statistics on Polish retail sales appeared on the market, which increased by 5.4%. YoY clearly stronger than analysts' expectations. On the other hand, in the “textiles, clothing, footwear” category there was an increase of 9 percent, which should be interpreted as a slowdown in dynamics from over 20 percent. recorded in September. Let us add that the shares of CCC – another fashion giant from WIG20 – decreased by 1.03% on Tuesday.
Apart from LPP, banks stood out in WIG20 with increases of Pekao by 3.89% and Santander by 3.7%. or PKO by 3.47 percent In this respect, only mBank failed with WIG20, losing 2.04%. Alior, in turn, gained 2.64%. It is worth mentioning that Erste Group has updated its recommendations for the shares of eight banks listed on the WSE and the “sell” recommendation applies only to mBank.
Positive data on retail sales could translate into a good session for Pepco (3.64%), and Budimex's share price is still doing well (2.74%), growing for another session in a row, which can also be seen as a game for peace and a chance for the company's involvement in the reconstruction of Ukraine.
On the other hand, falling oil prices (by 2.5% on Tuesday) seem to be weighing on Orlen (-1.44%), whose price has moved away from the last peak by over 9%. The price has already had four sessions of declines in a row and six in the last seven sessions. The sell-off intensified after the latest third-quarter results, which, apart from lower net profit, were in line with forecasts. On Tuesday, Grupa Azoty announced that it was still analyzing Orlen's non-binding offer to purchase shares of Grupa Azoty Polyolefins. He expects that a preliminary agreement between stakeholders regarding this company will be reached in the near future. The total value of the offer is PLN 1.022 billion.
PGE shares were still below the line in WIG20 (-3.29%), which dropped the most, and the decline in energy companies also affected Tauron (-4.59%) from mWIG40. On the other hand, Enea and Energa gained over 1%.
Elektrotim's shares performed poorly on the broader market (-9.3%), which reported results for the third quarter. Archicom's share price fell (-2.11%), after the development company reported results for the third quarter, where the profit was 11%. below market expectations.
Michal Kubicki
