Share prices on the Warsaw Stock Exchange fell across all sectors on Monday, as contagion from US market jitters spread in Europe.
The biggest drops in share prices on the Polish stock market, which saw the WIG 20 index of its largest companies fall by 4.3% before recovering slightly, were in the mining and energy sectors, where the indices have fallen by over 6%.
However, some biotechnology and medical stocks have risen.
Polish Copper (KGHM), the largest copper producer in Europe, which is dependent on growth in the tech sector, fell nearly 7%.
Meanwhile, US markets opened on Monday with a significant downturn, adding to Friday’s woes.
The Dow Jones Industrial Index was down some 1,000 points on opening, while the main European markets have fallen by 3.6%.
Analysts from Polish financial website stooq.pl pointed out that the currency markets have not behaved as they normally would when the US markets fall.
“The second day in a row of strong strengthening of the EUR/USD exchange rate. This is quite an unusual situation, because investors are used to the dollar strengthening along with declines in stock prices," Marcin Mierzwa, of stooq.pl, said on Monday.
“For now, this is definitely not the case. The dollar is weakening, and the EUR/USD exchange rate is rising,” Mierzwa added.
The Polish zloty is also holding strong this afternoon at 4.30 against the euro, gaining against the US currency, with a exchange rate of 3.91.
However the Swiss franc has strengthened to 4.60 zlotys and “is the strongest against the euro that has ever been in history,” according to Polish financial website bankier.pl.
Analysts suggest the reasons for the fall in US stocks are twofold. Firstly employment data was worse than expected, suggesting that a recession in America is in the offing.
As a result, many market players believed the Federal Reserve, the US rate-setting body, should have cut interest rates and stimulated the economy earlier, rather than waiting until September.
A second factor is the fall in values of the so-called “magnificent seven” of tech stocks, with AI chip maker Nvidia’s shares dropping over 7% today alone.
That has led investors to question whether a stock bubble has formed in the AI sector, and whether it has just burst.
However, some biotechnology and medical stocks have risen.
Polish Copper (KGHM), the largest copper producer in Europe, which is dependent on growth in the tech sector, fell nearly 7%.
Meanwhile, US markets opened on Monday with a significant downturn, adding to Friday’s woes.
The Dow Jones Industrial Index was down some 1,000 points on opening, while the main European markets have fallen by 3.6%.
Analysts from Polish financial website stooq.pl pointed out that the currency markets have not behaved as they normally would when the US markets fall.
“The second day in a row of strong strengthening of the EUR/USD exchange rate. This is quite an unusual situation, because investors are used to the dollar strengthening along with declines in stock prices," Marcin Mierzwa, of stooq.pl, said on Monday.
“For now, this is definitely not the case. The dollar is weakening, and the EUR/USD exchange rate is rising,” Mierzwa added.
The Polish zloty is also holding strong this afternoon at 4.30 against the euro, gaining against the US currency, with a exchange rate of 3.91.
However the Swiss franc has strengthened to 4.60 zlotys and “is the strongest against the euro that has ever been in history,” according to Polish financial website bankier.pl.
Analysts suggest the reasons for the fall in US stocks are twofold. Firstly employment data was worse than expected, suggesting that a recession in America is in the offing.
As a result, many market players believed the Federal Reserve, the US rate-setting body, should have cut interest rates and stimulated the economy earlier, rather than waiting until September.
A second factor is the fall in values of the so-called “magnificent seven” of tech stocks, with AI chip maker Nvidia’s shares dropping over 7% today alone.
That has led investors to question whether a stock bubble has formed in the AI sector, and whether it has just burst.
Source: TVP World, WSE, Strefa Inwestorów Stooq.pl
