$100 Oil Hits Markets. The specter of inflation drives the prices of traders and companies listed on the Warsaw Stock Exchange to grow by 118%. in two days
Thursday's session on the Warsaw Stock Exchange was marked by significant declines, dictated by another jump in oil prices above $100 per barrel. Iranian attacks on tankers in the Strait of Hormuz are intensifying, and the global “risk-off” sentiment dominates markets from Asia, through Europe to the USA. The WSE was drawn to the rising prices of retail chains, where investors can count on an inflationary impulse boosting results and margins.
At the close of Thursday's trading on the WSE the blue chip index WIG20 fell by 0.65%ending the day at approximately 3,291 points. The end of the session brought a counterattack by the bulls, as less than an hour before the fixing, WIG20 lost over 1.8%. The broad WIG index ultimately decreased by 0.77% to 120,935 points. A larger scale of sell-off was recorded in the segment of medium-sized companies, where mWIG40 fell by 1.35%, while the smallest entities from sWIG80 lost 0.83%. Turnover on WIG reached PLN 2.5 billion, of which PLN 2.17 billion concerned WIG20 companies.
Europe and the USA are at a crossroads together
Warsaw was not alone in its weakness. Investors around the world fled from risky assets towards the dollar and raw materials. Kurs EUR/USD fell to the level of 1.15, the breaking of which could mean further strengthening of the American currency at the expense of the euro to the next support level, which is the minimum from August last year around 1.14. In Europe, the DAX index lost 0.5%, the French CAC40 fell by 0.8% and the British FTSE100 fell by 0.6%. The mood was worse overseas at the close of the session in Poland – the S&P500 lost 1%, and the technological Nasdaq Comp. decreased by 1.3%.
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Expensive oil and the return of inflation?
A key one the catalyst for the declines were reports from Iran. A barrel of oil broke through the USD 100 level again the threat of a long-term blockade of the Strait of Hormuz raised concerns about the return of high inflation. Agency dispatches reported that Iranian attacks on tankers in the Strait of Hormuz were intensifying. In addition new supreme leader of Iran, Mojtaba Khamenei announced on Thursday in his first speech that the closure of the strait should continue. Meanwhile, the US is currently unable to escort tankers and other civilian ships through the Strait of Hormuz.
“Geopolitics remains the focus of investors' attention. The market is now trying to assess the possible long-term effects of the war in Iran. The dynamic increase in oil prices has already translated into rising energy costs, which will have a pro-inflationary effect in the long term. Possible increases in interest rates or even a halt to the monetary easing cycle are, of course, unfavorable news for shareholders,” Arkadiusz Banaś, an analysis expert in the Alior Bank Analysis and Advisory Team, commented for PAP Biznes.
“The main domestic indices do not stand out compared to foreign markets and are also seeing declines today, regardless of capitalization (large, medium-sized and small companies are falling). Among the Warsaw blue chips, representatives of the retail sector stand out and they are actually the only companies from the WIG20 index whose quotations remain above zero today,” he added.
The banking sector is in retreat, retail trade is in defiance
Among the largest WIG20 companies, eyes were on PKO BP (-1.8%). Despite the historic success – net profit for 2025 exceeded PLN 10 billion for the first time in the history of Polish banking – investors were very cautious. The entire WIG-Banki subindex fell by 1.57%, being one of the weakest on the market, next to mining (-1.65%), media (-1.77%) and construction (-1.79%). Given the global risk-off mode, bank shares, especially the largest ones, are the main exit gate for foreign capital due to their liquidity. Similarly, when the demand for shares from the Polish stock exchange and the exposure of foreign capital to our market increases, they are also the first choice.
They were at the other extreme companies from the retail sector, which were the only ones to resist the discount. Pepco (4.10%) became the growth leader in WIG20. Allegro (1.47%) reacted positively to the excellent financial results (net profit 36% above the consensus) and the announcement of the share buyback. Dino Polska was also strong (3.16%).
Modivo (0.71%) also ended the day in positive territory, although in the latter case it could have been a correction of the recent weakness. The LPP (-0.44%) rate is down, and Reuters reports that the conflict in the Middle East has hit the clothing industry as flight restrictions have left clothing shipments stranded in Bangladesh and India.
Strongest in WIG20 Kruk lost (-3.71%), and significant declines were also recorded by Orange (-2.68%) and PZU (-2.92%). Budimex (-2.15%) and Kęty (-2.21%) also gave over 2 percent.
Worth returning attention to Orlen's price, which fluctuated around the reference level for most of the session, despite information about planned write-offs in the amount of PLN 8.6 billion and the offer to take over Grupa Azoty Polyolefins. Apart from rising oil prices, information that the government is considering reducing VAT on fuels, which could support consumption, could provide support.
Ultimately, the price gained 1.24% and is now at PLN 130.50, i.e. 3 percent from the historical peak. In turn, the capitalization (taking into account emissions in connection with the mergers of Orlen with Lotos and PGNiG) is the highest in history and already amounts to PLN 151.5 billion, i.e. over USD 40.8 billion at the current, high USD/PLN exchange rate in recent quarters. More about Orlen's good condition in the article “Record recommendations, waiting for the highest dividend and Orlen more expensive than Gazprom”.
Broad market and a 118% rally.
There was also no shortage of emotions behind the scenes of the blue chips. Grupa Azoty stood out in the mWIG40 index (2.65%), supported by declarations of stabilization of fertilizer prices and Orlen's offer for Grupa Azoty Polyolefins. In turn, the biggest supply hit was experienced by the tourist operator Rainbow Tours (-5.27%). Among small companies from sWIG80, the XTPL price stood out (7.53%)after information about the recommendation of high co-financing of the project from NCBR funds. The price of Toya fell the most in sWIG80 (-3.90%).
Wide the market followed the rally of the PZ Cormay price (54.9%)whose growth impulse was Wednesday's announcement about signing an agreement with the American Planet Innovation Products regarding the Equisse 400i biochemical analyzer. The price has already gained over 118% in two sessions.
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