As a pretext for a correction on the stock market, we can also mention the increases in energy prices – today crude oil was in the black over 3%, and gas even 7%. The main European stock indices started trading below yesterday’s closing levels, and in the first minutes of the session there was a deepening of the sell-off. Despite a considerable rebound that took place after 12:00, the vast majority of indices from the Old Continent ended the day below the line. The German DAX overestimated over 1 percent and for the first time in a long time closed the day below the psychological barrier of 16,000 points, which may pose the risk of a deepening of the downward correction in the short term. French CAC40 lost 0.85% and London’s FTSE100 gained 0.15%
As far as our Polish market is concerned, the WIG20 index performed exceptionally well compared to foreign counterparts and closed the day with a result of + 0.59%. It should be noted, however, that the index of the twenty largest companies on the WSE has been under seller’s pressure for a month, and today’s upward move can only be seen as a recovery from the recent strong declines.
Looking at individual components from WIG20, CD Projekt shares did very well, with an upward move of 3%. A similar move was also observed in the LPP stock, where the increases reached 2.8%. On the other hand, we observed a significant sell-off on the CCC and Tauron quotations, here the declines amounted to 2.84% and 2.55%, respectively.
Looking at the US market, the major stock indices in the US started the session with declines, which should be explained by the nomination of Jerome Powell for the next term of the Fed president, mentioned in the introduction. Powell is seen as a more hawkish candidate compared to Brainard.
Technology companies are under the greatest pressure today, after 7pm the US Nasdaq is trading as much as 1.3% lower, while the S&P 500 lost 0.45%, and the Dow Jones is trading in the reference level regions. Another risk that has appeared on the market in recent days is also the accelerating wave of coronavirus cases, which may affect the market sentiment. If the situation does not improve, it will be another excuse to make a correction in the already warmed stock market.
XTB Financial Markets Analyst