Stocks report: Politics in focus

The WIG20 was trying to break through technical support at 2,720 points, but it wasn't successful. Fresh 2006 lows were hit but the WIG20 returned above 2,800 points later the week.

Low inflation figures in Poland helped the market to stabilize and regain some ground. Oil stocks were up and the small and mid-cap sectors also did well. A much weaker złoty - though after a huge correction - seems to be heading north. However, the flow of funds out of Poland was obvious as attacks on Leszek Balcerowicz became front-page news in the Financial Times. A successful break through 2700-point level could quickly bring stock prices lower by 200-300 points.

It could also work out in the opposite way. The resistance at 2,950 points, if broken, could bring stock prices much higher. So probably after a couple more days or weeks of consolidation, the WIG20 should move forward.

The stocks to watch are small caps and banks - Pekao-BPH merger news could deeply influence that sector. Many smaller companies are skyrocketing once again and have huge risk/loss potential.

Adam Łaganowski,

WGI Dom Maklerski