CEE Stock Market Report for August 24 – September 4

By: The Quinnipiac University Economics Research Team, Jack French

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

Central European stocks were mixed yet again over the last two weeks. The Hungarian BUX and Polish WIG 20 faltered while the Czech PX, Slovakian SAX, and Romanian BET all gained. The UK market tracked the BUX and WIG 20 closely. The US S&P 500 was on a strong run for over a week until Thursday and Friday when it fell more than four percent in just two days. The S&P did still have a modest gain of just under a percent for the two weeks. The SAX jumped late in the week and finished just higher than the S&P while the PX closed just below. The BET led the way for all indices with a gain of nearly four percent. The WIG 20 fell more than three percent and BUX lost slightly over four percent.

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.

The US market had its biggest drop since June at the end of this last week. Despite that, it is still well above its pre outbreak level. Not only is no CEE index that high but none are even within five percent of where they were in February and only one, the SAX, is within ten percent. One positive development for CEE stocks is the BET setting its highest close going back to the early stages of the pandemic. No other index is trading above where it was in early June. Most are well below three month highs suggesting that while there was a strong recovery from their March lows, the recent trend is flat to downwards.

There is a concern, warranted or not, that the US market has peaked for the time being and could begin to lose ground. What this would mean is unclear for CEE markets considering how much they have trailed the US over the last few months. A convergence is possible, but it also reasonable to think that a drop in the US would hurt elsewhere as well.

Source: Own calculations based on data collected from each index. The first graph shows the previous week’s performance. The remaining graphs show the three-month performance of each of the indices.


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