Stocks report: Negative territory

The blue-chip WIG20 index was down by five percent, while the overall WIG index erased nearly eight percent last week.

The negative mood on the WSE again stemmed from losses on US stock markets. Those markets managed to find some traction and retrace some of their earlier losses in the middle of the week. Investors in Poland didn't find the bounce helpful, however, and Polish indices plunged to several month lows. Market breadth was extremely negative as only 14 stocks advanced, while 332 declined on the week.

It is hard to find a concrete cause for such a sudden withdrawal from these stocks as the longer-term perspectives for Poland are positive. But I'm afraid investors are counting on even lower prices in the coming weeks and they probably preferred to cash in their portfolios.

Falling stock prices also had a negative impact on mutual fund retail investors, who rushed to withdraw money from funds. This caused additional supply, which pushed prices down.

Construction, IT, food, media and banks led the market lower, each of those sectors' benchmarks lost more than eight percent on the week. No sign of a reversal has appeared yet, so I assume that stocks will be under pressure in the coming week.

Tomasz Jerzyk,

technical analyst DM BZ WBK SA