The equities market in the United States is not being favored by investors recently. Every now and then information regarding big losses of financial companies hits the market. Investors are worried that losses of financial institutions from the subprime mortgages market might be bigger. Such expectations cause the outflow of capital from the equities market. During mid-week it seemed that US indices might rebound but the end of the week brought us strong declines. Despite that, the Dow Jones Industrial Average gained 0.75% till Thursday to 13,103. The S&P500, a broader measure of the US stock market, advanced 0.32% to 1450.9.

When analyzing the charts of Asian markets, one can notice a strongly resemblance between Asian and American stock indices. After gaining for the first part of the week, the Japanese Nikkei 225 tumbled on Thursday to finish the week with a 0.15% gain to 15,156.

The Warsaw Stock Exchange experienced the biggest gain on Tuesday, when large corporation published their quarterly reports. PKN Orlen and Lotos, both from the petroleum industry, published better-than-expected results lifting the WIG20. The rest of the week brought declines caused by increasing risk aversion. Foreign investors cashed their investments in Poland causing the outflow of capital from the equities market. That in turn weakened the Polish currency. The WIG20 ended the week at 3,520, 2.09% below the level at which it started the week.

Further declines are still possible. The next important support level is at 3,300 and the WIG20 can reach it. A possible interest rate hike in Poland by the Polish Monetary Policy Council on their November meeting might cause investors to move their funds to assets that can provide higher yields, like bonds. Of course, the biggest movements of the WSE’s major index will be caused by news flowing from the United States.

Adam Narczewski