Stocks report: Plunges on the WSE

The main WIG and bluechip WIG20 indices declined by more than 6.5 percent, and the mid-cap mWIG40 erased seven percent, following on from a nearly 14-percent drop in the previous week.

This time, negative expectations for the week caused people to sell stocks or withdraw money from mutual funds. Market breadth remained negative, as 285 stocks declined while 56 gained on the week, a ratio of 5:1. This suggests that sellers still dominated on the market and it was hard to see any signs of a reversal of that trend.

Some buying appeared on Thursday, but I'm afraid it was only a correction and that the overall trend is towards a bear market. In the short-term perspective, the market is in an extremely oversold condition so it is quite realistic that prices will increase slightly at the beginning of this week. But in the longer term, the WSE is certainly not out of the woods and I expect more selling in the coming weeks.

Last week oil companies and IT shares led the market down, with PKN Orlen losing the most among oil companies. The firm didn't disclose any information, so it is difficult to link that drop to any particular cause. The best-performing sector, relatively speaking, was media. It lost the least, mainly due to TVN, which gained more than two percent on the week.

Tomasz Jerzyk,

technical analyst DM BZ WBK SA