While earlier for an extended period, we have seen the relative strength of the Warsaw Stock Exchange, last week Polish investors were rather on the defensive. Foreign capital apparently was waiting for developments, as WIG20 increased only by a symbolic 0.1%. The same capital is unlikely to be pleased with the results of the presidential elections in Poland, the outcome of which increases the likelihood of changes in the balance of power in parliament after the autumn elections.

European stock exchanges were in retreat in the past week. The scale of declines were similar to previous week gains. Positive technical situation was negated on DAX (declined by 2.2%) hence the risk of descent to 11,000 is quite substantial. The Paris CAC40 also declined, but in a slightly smaller scale (by 1.9%). Most of a week government bonds were in retreat. German Bunds recovered some losses towards the end of the week.

Weekly comment MM Prime TFI  - May 11, 2015

Since the beginning of the year, we have noticed clearly improved sentiment on the WSE. While the beginning of the year was dominated by small and medium-sized companies, since the launch of the European version of quantitative easing, large companies were in domination. The WIG20 gained 5% in April, while mWIG40 went up by 3.5% and sWIG80 by only 2.3%.

Last week indices at Książęca did not change much. Biggest price delta of 0.2% was noted on a declining WIG20 index. Considering significant increases of the index during recent weeks, such correction brought only a little pain to WIG20 long investors. This correction may easily transform into a deeper decline, which does not have to strike out a slowly emerging bull market on the WSE.