Red in Europe. DAX and CAC40 fall sharply, but the GPW shows incredible strength
Pessimism dominated most of the Old Continent’s indices. The biggest losers were the DAX and CAC40, which were overvalued by 2.35% and 2.18% respectively. Declines were also evident in London (FTSE100: -1.66%), Zurich (SMI: -1.30%) and Milan (FTSE MiB: -1.22%).
The most important European index, STOXX, clearly lost in the first trading hours, ultimately closing below the line, weaker by 1.61%.
German investors decided to sell bonds from their portfolios, which translated into higher yields. The 10‑year bundle yield remains at 3.082. Compared to Western European competitors, the domestic market performed better.
Inter Cars (+5.51%), Creotech (+4.56%) and Text (+4.21%)
The second line of companies showed remarkable strength, being the only one to finish the day above the line. With the support of Inter Cars (+5.51%), Creotech (+4.56%) and Text (+4.21%), the mWIG40 index strengthened by 0.23%. Slightly below the line, the trade finished the aggregate of domestic blue chips. The WIG20 index, supported by Orlen (+3.51%), ended the day weaker by only 0.05%.
Will AI drive inflation? The hawkish Fed chills markets, and Broadcom scoops billions from Apple
The broad WIG also weakened by a similar amount (-0.06%). In Warsaw, the third line of companies performed the weakest. The sWIG80 index, representing the smallest entities, lost 0.47%. Domestic investors decided to sell fixed‑income instruments regardless of tenor. The 2‑year yield (4.265%) rose by 5 bp, and the 10‑year by 9 bp, to 5.443%. The most important macroeconomic event was the Monetary Policy Council’s decision to keep the main reference rate at 3.75%.
Recall that in 2025 the Council decided on six rate cuts, while in the current year there was only one cut: in March. Across the ocean, a clear risk‑off dominated, leading to a sell‑off of indices. Rising oil prices negatively affect the industrial sector, as illustrated by the clear undervaluation of the DJIA (-1.09%).
The broad S&P 500 index fell 0.28%, while technology gained: the Nasdaq 100 rose 0.27%. The star of the session was Broadcom, strengthening by 4.83% after reports of a new processor supply contract with Apple worth 30 billion dollars.
Investor focus also turned to the minutes of the last June FOMC meeting, which confirmed the hawkish stance of some committee members. A key element was also the clear emphasis on the potentially inflationary impact of artificial intelligence.
A morning look at Asian markets presents a mixed picture. One and a half hours before the start of European trading, Japanese indices strengthen: Nikkei gains 1.19% and Topix 0.02%. The lack of conviction among investors is seen in China. The continental Shanghai Composite gains 0.32%, while the Hang Seng clearly weakens (-0.99%).
The buying advantage is evident in India, where the Sensex (+0.59%) and Nifty (+0.57%) rise similarly. KOSPI, which has been highly volatile recently, loses just over half a percent. Near the line, precious metals are recently being sold off.
Gold gains 0.04%, and silver 0.14%. Metals benefit from a weaker situation in the U.S. labor market, while the suspension of the ceasefire in the Middle East weighs down.
