Stocks report: A negative start to 2008

The most important influence on the week came in the form of employment data from the US. Markets around the globe found the figures very disappointing. They seem to confirm worries of a recession for the US.

Non-farm payroll data showed an increase of just 18,000 in the US, compared with an expected rise of 70,000. At the same time, the unemployment rate rose to five percent. Investors all over the world rushed to sell both US dollars and stocks, assuring that the week would end in negative territory.

In Poland, big banks lead the market down. Signs that inflation is growing abound and investors anticipate that the Polish Monetary Policy Council (RPP) will soon raise the official interest rate. Real estate developers' shares were down for the same reason, as higher interest rates threaten to cut into their activity.

BZ WBK, BRE and GTC were particularly hard hit among those sectors, with each closing the week around five-six percent down. The only winning sectors were telecoms and oil companies.

If we take the overall market into account, last week was quite positive for smaller stocks, which lost a lot in the second half of 2007. It is hard to find any positive message in index patterns, though, and I expect more selling this coming week.

Tomasz Jerzyk,

technical analyst DM BZ WBK SA