Stocks report: A weak week all round

Global equity markets were all down, the "black Thursday" in Warsaw brought an almost four percent fall in prices with leaders among banking and oil companies. The WIG20 stopped falling at 2,290 points, more than 11 percent below its peak earlier this month. The outlook for the market is still negative, although in the coming days bargain hunters may be able to fight back against bears.

Volume during the selloff was surprisingly low, reaching only zł.900 million during the slide. Foreign investors, very active on foreign exchange markets and the fixed income market, held their breath, as current blue-chip prices are well below the highs. If big investors start disposing of their equities, the selloff will be much greater. Rising US Treasury yields are causing uncertainty in Poland and current falls are not the end of the downward trend. As the optimism returns to the market, foreign investors will look for a moment to take profits on Polish equities. This might limit the upside potential for the coming days and weeks.

A sharp decline in stock prices in Warsaw could impact the very rapidly growing IPO market. The queue of new companies willing to go public may be trimmed if the current downtrend continues.

Adam Łaganowski, Warsaw Investment Group (WGI)