Stocks report: Politics takes its toll

The WIG20 lost nearly three percent while the WIG overall market index shed 1.3 percent. Again, falling raw-material prices worldwide pressured oil companies as well as copper producer KGHM.

Another important factor was the disintegration of the governing coalition, which created uncertainty on the market. The biggest party, PiS, is trying to form another coalition, but if it fails new elections will be held later this autumn. Additionally, riots and unrest in Budapest caused a wave of selling in telecommunication stocks as well as big-cap banks, which behaved strongly in previous weeks.

Among the medium-sized companies I would like to stress the behavior of Dębica, Cersanit and mid-cap banks Getin and Millennium, which are MidWig bellwethers. In the longer term it's rather not possible for indices to move in opposite directions, so investors should stay cautious to medium-stock advances.

Cersanit was in the news, and the company said it's going to take over a 45- to 48-percent stake in Opoczno (a tile producer) from CSFB Ceramic Partners. This met with a positive reaction, and both companies gained.

Tomasz Jerzyk,

technical analyst DM BZ WBK SA