Stocks report: Volatility returns

Shares got a particularly strong hit on August 16, when investors returned to trading after the national holiday. US indices set new short-term lows as the Polish market opened at a harsh low.

During the session the blue-chip WIG20 index lost more than 6.5 percent and some panic reactions were seen on some stocks. Bargain hunters entered the market, but new lows were registered on the 17th. It was the totally unexpected US Federal Reserve decision to cut its discount rate by 50 basis points that helped to lift some prices higher. But still on the week ending August 17, all WSE indices were in the red.

Relatively, banks and telecoms lost the least, due to the Fed decision, but smaller and medium-size companies were sharply lower, particularly in the media, food and construction sectors. Ampli, Elektrim and Northcoast lost the most (27-36 percent on the week), while TUP and Jupiter soared by 30 percent. Elektrim filed for bankruptcy protection, and Northcoast disappointed the market with its Q2 figures.

Another risk is the possibility of withdrawals from mutual funds, flooded recently with money from fresh investors.

Tomasz Jerzyk, technical analyst DM BZ WBK SA