Summary

There was an Easter atmosphere in the financial markets last week. Furthermore, many global stock exchanges were opened until Thursday. Nevertheless, previous week was rich in economic data releases. In the Eurozone, the value of the consumer confidence index was higher than expected. In addition, the readings of the PMIs caught investors a little bit by positive surprise - the industrial PMI stood at 52.4 pts. vs 51.2 pts. expected and the services PMI amounted to 54 pts. vs 53.2 pts. expected. It is also worth paying attention to the Ifo Business Climate Index for Germany. It stood at 106.7 pts. in March vs 105.5 pts. expected. In the US, data on new orders for manufactured durable goods failed. On the other hand, the dynamics of the annualized GDP growth in the fourth quarter of 2015 amounted to 2% y/y vs 1% expected. Moreover, it should be reiterated that the commodity prices declined last week. The crude oil price moved towards south and then it oscillated around 40 dollars per barrel. What is more, there were terrorist attacks in Brussels. Nonetheless, these dreadful events did not significantly impact on the market sentiment. During the whole week, the S&P500 decreased by 0.2% and the NASDAQ went down by 0.03%. Unlike to them, the DJI increased by 0.2%. In Europe, French CAC40 declined by 2.6%, British FTSE250 deteriorated by 1% and German DAX fell by 0.4%.

An Easter atmosphere accompanied the WSE as well. During the whole week, the WIG20 went down by 0.4% and the mWIG40 decreased by 0.3%. The sWIG80 ended the week in a positive territory – it rose by 2.1%. It is worth noting that Tuesday’s terrorist attacks did not significantly affect the market tone in Poland. There were not also a lot of data readings. Investors learnt the unemployment rate. It stood at 10.3% in February, in line with market consensus. However, investors focused on the last financial results of companies. Quite good results for the year 2015 were presented by Ursus, although they were slightly worse than for the year 2014. In contrast to Ursus, PKP Cargo published poor financial performance for the fourth quarter of 2015. The company deserved the loser of the week name - its share price fell by 17%.

The release of data on American labor market (payrolls) will be the event of the week. Moreover, there will be a publications of the industrial PMIs in China, Eurozone countries and Poland. It all happens on Friday which will be the most important day of the week. In addition, it is worth paying attention to the reading of the Chicago PMI and the ISM Manufacturing index for the US. Investors will also learn a preliminary March HICP inflation for the Eurozone.

Technical analysis

Graph 1: WIG20 daily. Source: Stooq

The WIG20 ended previous week at 1,936 pts.. The decline of the index could have been caused by upcoming Easter. As a result, there were lower volumes. The RSI oscillator broke the level of 70 pts.. Subsequently, it fell sharply. Nevertheless, most oscillators and moving averages indicated a strong buy signal. Furthermore, if next session brings an index growth, the hammer formation will be created. It will be an announcement of further increases. Thus, it seems that the index of the largest companies may move towards the psychological level of 2,000 pts.

Graph 2: Polnord daily. Source: Stooq.

Polnord deserved the company of the week name. During the whole week, its share price grew by 14.3%. The course broke the line of the long – term downward trend and then tested the support of PLN 10.6. However, it was too strong. Therefore, the share price started to rise. The RSI oscillator pointed out the overbought, whereas the MACD oscillator indicated a buy signal. What is more, moving averages formed a golden cross formation. Recent growths were confirmed by higher volumes as well. Consequently, the prospects seem to be promising. The nearest resistance stands at PLN 13.7.

Authors: MM Prime TFI S.A. Investment Management Team

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