Often, the first reaction of stock market investors to crisis events (such as an armed attack on Iran and the escalation of the conflict in the Middle East) is very strong, even exaggerated. This is usually followed by stabilization of stock exchange prices or even increases that correct valuations to more realistic levels. The first two days after an extremely intense weekend do not fit into this pattern.
The rest of the article is below the video
The declines on stock exchanges in Europe and the USA are deepening. Tension is rising
The main index of the Warsaw Stock Exchange lost only 1 percent on Monday. On Tuesday, there was a reduction of another 4.5%. It was similar on other major European trading floors. The German and French stock exchanges lost about 2 percent the day before. The next 24 hours brought a decline of 3-3.5%.
|
investinfo.pl
We've only had 90 minutes of trading on the American stock exchange, but everything is heading in a similar direction there. We wrote more about the start of the session on Wall Street HERE.
Therefore, we are not only dealing with an escalation of the conflict in the Middle East, but also an escalation of tension in the financial markets. Wall Street's fear gauge, the VIX, rose 22%. and reached its highest level in three months. Simultaneous changes in the prices of gold, the dollar and crude oil suggest an intensive search for safe havens.
See also: The price of gold surprises. Kruszec suddenly stopped acting as a “safe haven”
Declines on the Warsaw Stock Exchange. Summary of the day on the markets
In total, about 80 percent on the Polish stock exchange. companies glow red. About 14 percent resisted the sale. market.
KGHM's shares lost the most in the WIG20 index (about 8%).. This time, the market turmoil also affected us in a negative way Orlenwhich was gaining strongly in the eyes of investors on Monday. Now there is 5 percent. below the line.
The highlights included, among others: energy companies. They have lost a lot in recent hours, including: state giants such as PGE, Tauron and Enea. The declines in shares of energy companies result from the sharp increase in uncertainty on global markets. The conflict in Iran directly translates into concerns about a drastic increase in the prices of energy raw materials, which is already visible. For Polish companies, this means higher costs of electricity production and potential problems with profitability.
It stood out positively among companies from the energy industry Polenergywhich focuses on renewable energy sources. Coal-related companies also gained significantly in value on Tuesday. JSW shares increased by 6% at the end of the session, and Bogdanka shares – by 9%..
Typically, the quotations of the largest companies are characterized by smaller changes than those of the rest of the market. This time it is different, which confirms the uniqueness of the situation.
There is no panic on the stock exchanges, but…
“There is no panic in the market, but there is great anxiety. The market is behaving quite intuitively, discounting the risks associated with this conflict, i.e. disrupted supplies of oil and LNG” – comments Mariusz Adamiak, director of the market strategies office of PKO BP, quoted by PAP Biznes.
“The domestic stock market is quite resistant to the current challenges we face in developed and emerging markets,” says Marek Kaźmierczak, manager at VIG/C-QUADRAT TFI.
“It is obvious that a possible correction in developed markets will have a negative impact on other stock markets, but to varying degrees. As an opportunity, it should be remembered that we are quickly approaching the season of abundant dividends. The conflict in Iran is an additional risk, but it should be recalled that the beginning of the increase in oil prices took place two weeks before the attack by Israel and the US. It cannot be said that stock markets are particularly surprised by the situation,” he points out.
In his opinion stock market weakness can be expected in the next month, and this will be a good opportunity to accumulate attractively priced companies. “In the vast majority of domestic companies, the situation is at least good or very good, which is why we remain positive about the domestic stock market,” emphasizes Marek Kaźmierczak.
