CEE Stock Market Report for March 23 – March 27

By: The Quinnipiac University Economics Research Team, Jack French

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

Following weeks of losses and the end of the US bull market markets rebounded significantly over the past week. The Central European Indices were pretty tightly packed with the slight exception of the Slovakia SAX which rebounded only about two percent. The Hungarian BUX was up about four percent while the Polish WIG 20 continued the uptrend it started the previous week and finished with just over five percent for a weekly gain. The Czech PX rose about six percent, and the Romanian BET led the CEE indices with a return of roughly seven percent. The US S&P had a massive week and posted a gain of nearly fourteen percent while the UK FTSE was up just over ten percent.

After the shocking downturn from the last two weeks investors may see this rebound as unusual. At least part of what drove the US market’s rebound was the announcement and progress of a rescue package of over $2 trillion and the US central bank’s commitment to using all its tools to prop up the economy. There was, however, a close correlation between the US and most of the CEE countries for at least the first three days of the week suggesting that the efforts either were believed to effect the rest of the world or were not the only driving force behind the market rally.

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.

The three month view of the indices shows that, despite the past week’s rally, the markets are still massively below their recent highs. For example, the Hungarian BUX rallied and closed the last week above 32,000 but was over 46,000 in February. A similar story exists for the remaining Central European indices as well as in the US and UK. The massive year to date losses remain for all of the featured indices.

Considering the fact that the market started tanking well before the full extent of the economic damage from the coronavirus was either anticipated or realized it is not shocking to see the market recover before the world does. While worsening conditions could still lead to more losses, there is a sense that it would be difficult for the situation to get much worse or for the economy to become more constricted. Whether or not that opinion appears shockingly short-sighted will only be known in the future. For now it will be interesting to note the differences in movement across the indices as well as the general correlation in market movements.


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