The session on the Warsaw trading floor on Monday was marked by extreme volatility, dictated by everything that is happening around the conflict in the Middle East. Although the day started with a sell-off, Polish investors showed fortitude by making up for most of their losses in the final phase of trading. The key topic of the day remained the oil market, which became hostage to Washington's tough rhetoric and concerns about the global supply of energy resources.
Monday greeted investors with a clear red on European stock markets. The war in the Middle East, resulting in rising energy prices, is a major cause for concern among investors – it is fueling inflation and clouding the prospects for interest rate cuts. The reaction to the weekend's several dozen percent jump in oil prices was immediate – the main indices of the Old Continent, including the Polish WIG20, lost over 2% at the opening.
The fear of a supply shock and a return of high inflation paralyzed trading, but with each passing hour demand began to come to the fore, taking advantage of low valuations to accumulate shares. Ultimately, despite the disastrous start, the main WSE indices closed the day with moderate declines, which can be considered a success compared to the morning declines.
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At the end of the session, WIG20 fell by 0.17%, but about half an hour before the fixing it was even in positive territory. WIG fell by 0.29%, with mWIG40 falling by 0.49% and sWIG80 falling by 0.89%. The turnover on the broad market was estimated at PLN 2.6 billion, of which PLN 2.13 billion concerned WIG20 companies.
Raw material geopolitics
The events on the dance floor were only an echo of political activities at the highest level. Markets closely followed reports of consultations between G7 finance ministers and the International Energy Agency on the possible release of emergency oil reserves, which would calm down the heated market. At the same time, US President Donald Trump added fuel to the fire, calling rising oil prices a “small price” to neutralize the Iranian nuclear threat. There were no signs of abating on the war front, despite Trump's assurances that “it had already been won.” Meanwhile, Iran has named Ayatollah Khamenei's son, Mojtaba, as its new supreme leader.
Dino and CD Projekt are in the black, clothing is under pressure
In the index of the twenty largest companies, five entities managed to end the day above the mark. The leader of increases from the morning was Dino Polska, ultimately gaining 3.34%. The Żabka Group also performed solidly, growing by 1.15%. Are investors counting on an inflationary impulse to support the results of retail chains? The growing group in WIG20 was closed by mBank (0.66%), CD Projekt (0.61%) and PKO (0.57%). It was the banks' good attitude that was mainly responsible for making up for losses.
On the opposite side of the pole there were shares of Modico (-2.67%), which was the weakest link in the blue chip index. The entire clothing sector performed poorly, with a decline in LPP (-0.82%) and Pepco (-0.57%). It is worth noting the announcement of the Pepco Group, which assures that it is well prepared for disruptions in supply chains thanks to long-term relationships with maritime operators and previously agreed volumes of goods.
Shares of PGE (-1.93%) and Kęt (-1.96%) were also under greater pressure. Budimex shares continue their poor performance (-1.71%). Last week, these securities were valued at PLN 800, while on Monday their price dropped to PLN 724.80.
Orlen is under political pressure again, KGHM is supported
KGHM lost 0.52% to PLN 289.40, although during the session the bulls had to defend the key support below PLN 280, which historically activated strong recoveries. In turn, Orlen lost 0.1%. The company is in a bind – on the one hand, rising prices of raw materials should support its valuation, on the other hand, the government, through Prime Minister Donald Tusk, announces protection for drivers and no acceptance of excess profits resulting from the war situation in the Middle East.
Coal benefits from supply concerns
In the lower segments of the market, industries sensitive to tourist sentiment suffered. Rainbow Tours shares fell by 4.46%, Enter Air shares fell by 1.86%. The bright spot was the mining companies – JSW (3.83%), Bogdanka (9.41%) and Bumech (2.84%). These increases are driven by coal prices, which have reached their highest levels in a year due to concerns about the supply of energy raw materials.
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