Stocks report: WSE takes a hammering

Volatility came back with a bang. Investors will be having nightmares about last Thursday for months to come, after the main WIG-20 index lost seven percent, but thanks to some bargain hunting was able to cut it's losses in half.

Friday opened sharply, with the WIG20 gaining five percent before relinquishing some ground and slipping downward towards the end of the day.

On a weekly basis the WIG-20 lost 6.7 percent and the overall market WIG gave away 6.2 percent. The breadth of the market remained extremely negative because only 19 stocks ended the week in positive territory and 215 lost, giving an 11 to one ratio in favour of decliners.

The main factors that created the negative mood on the market remained the same as those in the previous week i.e. strong declines on the global stock markets, especially on other emerging markets, as well as further drops on metal and oil futures markets.

The overall impression on the Polish market is negative but due to the fact that the correction erased nearly 25 percent of the nominal value from the top, I assume that any further declines will be short-term buying opportunities.

Tomasz Jerzyk,

technical analyst DM BZ WBK SA