New year on the stock exchange. Can small and medium-sized companies count on the January effect?

The last session in 2025 in WIG20 may suggest a local inflection point and the beginning of a recovery after December's increases. The opposite picture was generated by the smallest companies, where the last sessions of the previous year were successful – indicate analysts from the BNP Paribas Bank Brokerage House in the first morning comment of 2026.

The end of December was marked by declines

The last full day of trading last year was Tuesday. Although demand dominated in the main markets, changes were moderate due to limited turnover around the holidays. WIG20 gained 0.60% and during the day it even broke the level of 3,200 points. The smallest companies performed relatively better – sWIG80 gained over 1.0%, recording the second consecutive strong growth session.

In the above environment, indices from overseas stood out negatively and ended trading with moderate declines, but they deepened even further on Wednesday, when most markets were closed. In line with our expectations, the last few days have also seen a correction in the prices of metals, both those precious and those used more in industry. Gold prices ended the year around USD 4,300 per ounce, while silver prices dropped to USD 70 per ounce, which took place in an environment of increased volatility (changes during the session from +5% to -10%).

Inflation changes expectations towards the Monetary Policy Council

Today is the first session in the New Year, but due to the persistent Christmas mood, it is difficult to see higher volatility and turnover. Domestic investors may discount the reading of flash CPI inflation for December, which was published on Wednesday, which is favorable for decisions on further interest rate cuts. According to the flash reading, price dynamics in December decreased to 2.4% y/y from 2.5% y/y a month ago. Economists expected the level of 2.5% y/y to remain the same. Currently, BNP Paribas economists maintain expectations for two rate cuts by the Monetary Policy Council this year (in March and the second one in July at the latest).

However, we would like to point out that recent weeks have brought a downward revision of market expectations – currently the market assumes that the target reference rate will fall to approximately 3.2%, despite the recent quite hawkish comment from President Glapiński, who sees the target level of the reference rate at approximately 4.0%.

Will capital flow towards smaller companies?

The last session in 2025 in WIG20 (weaker buyers in the second part of the day) may suggest a local inflection point and the beginning of a recovery after December's increases. The opposite picture was generated by the smallest companies, where the last sessions of the previous year were successful, which may indicate the expected flow of capital to the segment of medium-sized and smaller companies (the so-called MiŚ), which would also fit into the so-called January effect.

Globally, the highlight of the day will be the publication of the final industrial PMIs for December for the largest economies and the first readings for smaller ones, including Poland. The previous reading for the domestic economy surprised slightly to the upside (an increase to 49.1 points from 48.8 points in October).

Adam Angel, BNP Paribas Bank Brokerage House

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