ZSE: Is Temporary Relief Coming?

Primarily due to positive movements in foreign markets, today there could be a temporary relief felt on the Zagreb Stock Exchange, and the Crobex indices could stop sliding after three days.

All 7 analysts from brokerage firms who participated in the Hina survey expect stagnation of the Crobex today. The Crobex index weakened by 0.15 percent yesterday, to 1,756 points, while Crobex10 fell by 0.22 percent, to 994 points. Regular trading reached 9.15 million kuna, which is approximately 8 million kuna less than the day before.

– Primarily due to pronounced positive movements in foreign exchanges, today there could be a temporary relief felt in the domestic market as well. After three days of slight decline, the Crobex indices could stagnate with a positive sign – says Tamas Nagy, a broker at Erste&Steiermaerkische Bank.

For several days now, the stock of Dalekovod has been in focus for investors as this construction company has had its account blocked for a long time. Media today report a statement from director Matjaž Gorjup that within 24 hours, the largest creditors should lift the blocks on Dalekovod’s accounts, or all future agreements will be in vain.

The State Bureau of Statistics will publish a report today on industrial production in October, which, macroeconomists estimate, will show that activity has fallen again, but somewhat less than a month ago.

Five macroeconomists who participated in the Hina survey estimate that, on average, industrial production in October slipped by 6 percent compared to the same month last year. All expect a decline, ranging from 5 to 7 percent, while in September, activity fell by 7.7 percent.

In foreign markets, optimism regarding negotiations on the U.S. budget has spurred a rise in stock prices in equity markets. Thus, on Wall Street on Wednesday, stock prices rose after a statement from John Boehner, the leading Republican in Congress, that a compromise on the budget is possible to avoid the ‘fiscal cliff’.

The Dow Jones index strengthened by 0.83 percent, while the S&P 500 rose by 0.79, and the Nasdaq index by 0.81 percent.

As a result, stock prices on Asian exchanges reached their highest levels in three weeks this morning, and stock prices on European exchanges also rose at the beginning of today’s trading.

– After financial aid was approved for Greece, the focus of investors is on the ‘fiscal cliff’ in the U.S. Yesterday, they were encouraged by Boehner’s statements about progress in budget negotiations aimed at avoiding automatic tax increases. The market was further uplifted by a statement from the Japanese opposition that the central bank and government should continue with monetary stimulus for the economy – notes Nagy.