CEE Stock Market Report for April 20 – 24

By: The Quinnipiac University Economics Research Team, Jack French

Source: Own calculations based on data collected from each index.

During a week of mild volatility, the Central European indices followed the US market fairly closely but with mixed results. The Czech PX led the way with a modest gain of just over half a percent and the Hungarian BUX rose a tenth of a percent. On the other side, the Romanian BET lost slightly, the Slovakian SAX dropped nearly a percent, and the Polish WIG 20 fell two and a third percent. The US S&P came in just under the Czech PX with a gain of slightly less than half a percent while the UK FTSE faltered late in the week and ended down about a percent. Massive movement in oil futures on Tuesday has been blamed for the early week losses in the US.

Source: Own calculations based on data collected from each index. This graph shows the performance of each index with the reference date of February 17th.

Despite fairly correlated day to day movement, there is now a sizable gap between the US and the CEE stock markets. This is despite the US being hit so hard by the epidemic and the Central European region seeing much lower cases. The Slovakian SAX is closest to its pre-crisis level while the Hungarian BUX is still the farthest, down over twenty five percent. Outside of the SAX no CEE index is within twenty percentage points of their mid-February level.

Markets have seen a sizable recovery from their March lows, but investors still no definitive end in sight for the current crisis period. A series of government stimulus has likely contributed, the rally has stalled out a bit in recent week with a number of CEE markets turning flat. The US market has leveled off a bit after a few weeks of rapid rise while the UK has been pretty much level since late March. For many the main concern is shifting to the eventual economic recovery and what that will look like.


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