Poland's blue chip share index climbs to key resistance level
Poland`s main WIG20 share index rose more than 2 percent to hit a resistance level of 2,500 points on Monday, the highest since May 2015 when the now ruling Law and Justice (PiS) ally won presidential election sparking investors fears over banks` performance.
One of President Andrzej Duda`s election promise was to force banks, which are heavily-weighted in the WIG20, to convert Swiss-franc mortgages into zloty-denominated ones to help troubled clients pay back loans after the Swiss franc surged.
Duda`s victory was followed by the PiS success in a general election in autumn 2015, which further put investors off the stock market amid concerns about the party`s unpredictability, extensive social spending and a drive to protect domestic business.
As a result, last year Polish shares underperformed regional peers largely due to banks, which may have lost money on the conversion of FX loans and to energy firms, which were forced by PiS to bail out troubled state-run coal mines.
But since the FX loans conversion plan has not materialised and coal prices unexpectedly rebounded, Polish stocks picked up, with the WIG20 gaining 27 percent since the start of this year, also driven by the economic indicators.
Poland`s growth domestic product grew by 3.9 percent year-on-year in the second quarter compared to a 4 percent rise in the first quarter, and the deficit is under control despite the government`s generous social spending.
"The (stocks) trend is still being supported by positive macro data," Wood&Co broker Piotr Kopec said.
Other brokers said that with the bank holiday in Britain, it were mostly U.S. investors that stood behind the Warsaw rally on Monday.
State-run oil refiners PKN Orlen and Lotos, which have been rising on recent good earnings reports, led gains, brokers also said.
The WIG20 index was up 2.5 percent at 2,533 points at 1441 GMT, while PKN and Lotos gained 4.8 percent and 3.9 percent respectively. Poland`s biggest bank PKO BP rose by 2.3 percent after its second quarter results came in above analysts` forecasts earlier on Monday.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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