Last week was another unfortunate week for the Warsaw Stock Exchange. Although the largest companies index (WIG20) declined by only 0.3%, small and medium-sized companies dropped dramatically by 1.2% (mWIG40) and 2.3% (sWIG80). Small caps index broke the support level of 13 500 points. As a result, a broad WIG index lost 0.6% in value. The WIG20 followed global sentiment, the scale of the decline was similar to situation on Western Europe exchanges.

Last week was another week of bear domination not only on WSE but also globally. Correction on the stock market was even present on Wall Street, where the S&P500 index dropped on a weekly basis second time in a row. This time index fell by 0.7%, but this time breaking down the barrier of 2100 points round. Larger-scale declines were observed in Western Europe, where major indices - the DAX and the CAC40 - were down by less than 2%.

Last week in the capital markets we saw correction that on some exchanges took quite a substantial size. First of all, this refers to the DAX, that declined by 3.4%. Other euro zone markets followed - CAC40 fell by 2.6% and the Madrid IBEX by 2.9%. Athens exchange, which is the main source of the problems, was not the worst, as it declined only by 1.8%.

While earlier for an extended period, we have seen the relative strength of the Warsaw Stock Exchange, last week Polish investors were rather on the defensive. Foreign capital apparently was waiting for developments, as WIG20 increased only by a symbolic 0.1%. The same capital is unlikely to be pleased with the results of the presidential elections in Poland, the outcome of which increases the likelihood of changes in the balance of power in parliament after the autumn elections.

European stock exchanges were in retreat in the past week. The scale of declines were similar to previous week gains. Positive technical situation was negated on DAX (declined by 2.2%) hence the risk of descent to 11,000 is quite substantial. The Paris CAC40 also declined, but in a slightly smaller scale (by 1.9%). Most of a week government bonds were in retreat. German Bunds recovered some losses towards the end of the week.