CEE Stock Market Report for February 22 – March 5

By: The Quinnipiac University Economics Research Team, Jack French

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.

Stock markets in Central Europe and across the world are now coming up on exactly one year from their covid related lows back in the middle of March 2020. It has been a long and unpredictable period for stock markets in the CEE countries with a wide range of performances. The past twelve months divide into several distinct periods of bear and bull runs. Over the few of weeks from late February of last year to mid-March, the major indices experienced losses from which most have still not recovered. With the most recent rally now seemingly halted, only the Romanian BET and Slovakian SAX are above where they were before the pandemic.

Following the initial drop, a strong but only partial recovery began and lasted until June 2020. After that phase, the CEE markets entered a flat or negative period that lasted through October. Starting in early November, the indices took off with a sharp recovery that continued until January and saw multiple CEE markets outperform the US S&P and UK FTSE by substantial margins. Now there have been almost two months of flat or downward market action. From January 7th to this past Friday, only the BET and SAX are positive. For comparison, the S&P has seen slight gains over that period, and the FTSE has lost a few percent.

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

The last two weeks were quite mixed for CEE markets. The Polish WIG 20 gave up some ground while the BUX surged early before dropping throughout the second week. The WIG and BUX both finished down over two percent. The remaining three indices had their share of up and downs, but all three finished with gains of just under two percent. The Slovakian SAX and Romanian BET had almost identical increases while the Czech PX closed slightly below them. The US S&P spent just about the entire two-week period in negative territory and finished down nearly four percent. In the UK, the FTSE tracked the S&P for the first week or so but then managed to stay positive and finish the two weeks with a slight gain. This comes after an already several week long period of volatile market activity.

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.