Weak zloty did not scare foreign investors. Impressive rally of WIG20 and banks
This sequence of events was undoubtedly a tough test for the thesis that a weak zloty does not serve Polish stocks. Interestingly, among the blue chips, each company ended the day with a rise.
It is therefore unquestionable that Friday’s WIG20 rally was the result of basket purchases by foreign investors who apparently decided to look more favorably at emerging markets again. The thesis of basket purchases is further confirmed by the fact that the banking sector performed very well during Friday’s session.
Shares of PKO BP, the second largest company by market cap on the GPW, gained almost 5%. It is worth noting that this happened in an environment where the futures market for interest rates began to seriously discount the scenario of rate cuts by the end of the year. This is a derivative of Thursday’s conference after the RPP meeting, during which NBP President Adam Glapiński suggested that after the holidays he would be willing to submit a request for a rate cut.
US tech rally does not relent
In our view, a situation in which inflation will oscillate closer to 3% year‑on‑year in the coming months does not provide sufficient grounds for such a move. Therefore we maintain our base scenario, according to which the next move by the RPP will be a rate cut, but only next year.
Increases, although not as large as on the GPW, were also observed overseas on Friday. The S&P 500 gained 0.42%, and Nasdaq 0.29%. The most important event was the debut of the American depositary receipts (ADR) of SK Hynix.
The first day of trading for the Korean memory manufacturer on Wall Street proved to be a great success, ending with a double‑digit rise. This confirms the thesis that despite the recent discount, proponents of the “semiconductor rally” do not intend to give up easily.
Interestingly, after a 16% discount, the iShares Semiconductor ETF (SOXX) recorded a one‑day inflow of $5.4 billion last Wednesday, the largest in the fund’s history.
In our opinion, further rally in this market segment will largely depend on the narrative coming from the Great Seven.
Escalation on the USA‑Iran line. Oil prices soar, Asia sinks in May
We do not rule out that a drastic rise in semiconductor prices, especially memory, could trigger a narrative toward slowing the current pace of data‑center construction investments. The answer to this question should come from the upcoming earnings season overseas. In the morning hours, oil prices rose by over 4% in response to the weekend escalation of tensions on the USA‑Iran line.
The US military intensified attacks on Iran after the Islamic Revolutionary Guard Corps again fired a missile toward a container ship passing through the Strait of Hormuz. In response to the intensification of US attacks, the IRGC announced the closure of the strait. However, President Donald Trump questioned these claims on Sunday, convincing that the key waterway remains open for commercial traffic.
According to Axios reports, in the last 24 hours, with coordination with the US military, about 20 ships managed to cross the strait. At the time of writing this comment, Asian markets returned to fear. The Korean KOSPI fell over 7%, while the Japanese Nikkei fell over 2%. Hang Seng and Sensex perform much better, benefiting from regional capital rotation.
European index futures suggest an opening below the threshold. After an exceptionally successful Friday session, a similar scenario is likely to await the GPW as well.
