This is the fourth session in a row with the decline of the WIG20, which deepens the correction of the blue chip index to the level of 2000 points. The day again brought broad declines in the portfolio of the largest companies. The market’s mood was spoiled by the hawkish Fed’s meeting minutes published on Wednesday night.
On Thursday, the WIG20 was down 1.13 percent, and the WIG was down 0.85 percent. Medium and small companies were relatively stronger, with the mWIG40 and sWIG80 losing 0.1 and 0.49 percent, respectively. The turnover in the broad market was PLN 854 million, of which PLN 657 million was attributable to WIG20.
The description of the discussions from the Federal Reserve meeting in July was seen as optimism, sending stock markets lower and US 10-year yields increasing to levels not seen since October 2022. Market speculation is growing about this decision – US central bank makers will extend Interest rate hike cycle, or at least they will maintain their current level for a long time.
According to FedWatch, the biggest possibility is about maintaining prices in the current range until the end of March, although a week ago, by then, the market was already pricing in cuts the most. The increase before the November meeting is estimated at about 41 percent. (about 10 percent more than last week). On Thursday, as usual, the unemployment claims numbers came to market, confirming the strength of the labor market and thus supporting the Fed’s hawkish stance.
The increase in risk aversion effectively sucks capital out of emerging markets, and in addition, the remarkable strength of the dollar against the zloty does not support the demand side, giving the market space to speculate along the entire line, so the WIG20, which is the most sensitive to sentiment Global, falls the most and after four sessions of the offer advantage has already given up more than 5.1 per cent
In terms of sectors, the automotive industry gave the largest share (-4.62%) and again banks (-1.63%), this time also fuel (-1.56%), and mining continued weak (-1.33%). The trading volume on the last three indices exceeded PLN 384 million. Almost all of the 14 industry indices were in the red, as they were down 0.48 percent. Construction increased.
The overwhelming dominance of supply was demonstrated again in the WIG20, as 18 companies plunged in prices. The following banks lost the most: Alior (-3.91%), mBank (-2.76%), Santander (-2.13%).
Although oil prices rebounded, the bid pushed Orlen stock prices down (-1.66%). Similarly, KGHM price did not react to copper price recovery (-1.24%), and JSW stock price headed towards a yearly low. (-1.42 percent). Cyfrowy Polsat (-1.95 percent) showed the full results report, with results falling short of expectations. Thus, the exchange rate has deepened further from its lowest levels in 10 years.
Only Allegro (0.53%) recorded increases in the basket, and Dino shares (0.0%) remained neutral.
In the lower segments of the market, attention was focused mainly on companies that showed earnings reports. Benefit stood out in this field (11.18%), whose profits came as a positive surprise.
On the other side was InteCars (-6.84%), which estimated net profit in the second quarter was well below expectations. It was similar with MoBruk (-4.05%), whose net profit in the second quarter of 2023 was about PLN 21 million and was 8.9% higher than in the previous quarter. lower than analysts expected. In turn, Creepy Jar (-1.06%) estimated net profit in the first half of 2023 at PLN 12.8 million, compared to PLN 18.6 million in the previous year.
The Board of Directors of Grodno (-1.92%) proposes that the net profit for the financial year ending March 31, 2023, amounting to about PLN 20.1 million, should be allocated to the company’s supplementary capital.
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