Stocks report: WIG20 back with a bang

Pro-market Civic Platform (PO), which has refused to back the new government, caused debt investors to flee but the WIG20 remains neutral to political developments. Large caps bounced back by more than four percent and the WIG20 returned above 2,400 points. The main factor behind the huge gains was the situation on global equity markets. Backing from the US certainly helped the WIG20.

The earnings release season began recently but the typical relationship - good sales and net profits in Q3 followed by a rise in stock prices - is not evident. Many companies are already sold out, following previous positive earnings surprises, especially small caps.

The end of the downtrend in Warsaw is over. Midwig, an index that shows the climate in the mid-cap sector, beat an all-time high last week. What will follow is, as always, the real question. As far as Polish stocks are concerned, there are currently more risk factors than possible additional return opportunities. The most threatening factor is Polish and US debt markets.

Adam Łaganowski, Warsaw Investment Group (WGI)