Stagnation at ZSE Ahead of Extended Weekend at the Stock Exchange

The last working day of this week at the Zagreb Stock Exchange is likely to see a continuation of the stagnation of the Crobex index, and given that there are no news to encourage the already few investors to greater activity, it is possible that a record low liquidity will be recorded today.

All 8 analysts from brokerage firms who participated in Hina’s survey expect a continuation of the stagnation of the Crobex today. The Crobex index rose by 0.36 percent yesterday, to 1,876 points, while Crobex10 increased by 0.31 percent, to 1,001 points, surpassing 1,000 points for the first time since June 29 of this year. Regular trading in shares amounted to 15.2 million kuna, which is about 9 million more than the previous day.

"Ahead of us is an extended weekend, so today I expect a continuation of the stagnation of stock prices in the domestic market. Given that there are no news to encourage the already few investors to greater activity, it is possible that we will record a record low liquidity today," emphasizes Matko Bošković, broker and investment advisor at Centar banka.

The next working day of the stock exchange is on Monday. On Thursday, August 5, is the Day of Croatian Defenders and Homeland Gratitude, and the stock exchange will not operate on Friday, August 6. "Neutral signals are also coming from global stock exchanges today," assesses Bošković. Stock prices on Wall Street fell slightly on Tuesday, as investors decided to cash in some of the gains made the day before due to disappointing business results from several companies and reports of stagnation in personal income and consumption of Americans.

As a result, stock prices also fell on Asian exchanges today, and local investors are additionally concerned about the continued strengthening of the yen against the dollar, which undermines the export results of Japanese companies. On European exchanges, stock prices are also slightly down this morning.

"Recently, there has been a relatively strong optimism visible in global stock exchanges, whose positive impact has also reached the domestic market in recent days. Investors are now less fearful of a double-dip recession in the U.S., and a better-than-expected economic recovery in the eurozone, led by Germany, has given them an additional dose of optimism," says Vjeran Jureša, broker and investment advisor at the investment company To One.

He adds that foreign investors are eagerly awaiting the release of U.S. labor market indicators over the next three days. Today, a report on the number of employed in July from the private employment company ADP is expected, while on Thursday, the U.S. Department of Labor will release weekly data on the number of new unemployed. On Friday, the key report on employment in the U.S. for July will be published.

These data will show investors what the prospects are for an increase in American consumption and, consequently, the further recovery of the U.S. economy. Consumers, in fact, will not increase their spending until they begin to feel more secure about their jobs. "In the domestic market, I expect only minor positive changes in the index, along with maintaining low trading levels. There is a noticeable absence of investors, so the continuation of positive movements due to low liquidity may have to wait a bit," concludes Jureša. (H)