Investors May Hit the Brakes

After diving to their lowest levels since the end of February yesterday, stabilization of the Crobex is expected today on the Zagreb Stock Exchange, as investors may hit the brakes after two days of significant stock price declines.

Of the 8 analysts from brokerage firms who participated in the Hina survey, 7 expect stagnation of the Crobex today, while 1 expects an increase.

The Crobex index fell by 0.81 percent yesterday, to 1,915 points, while the Crobex10 dropped by 1.02 percent, to 1,075 points. After two days of significant declines, both indices have plunged to their lowest levels since the end of February.

Regular trading in shares amounted to 5.2 million kuna yesterday, half of what it was the day before.

Only the shares of Petrokemija made it to the millionaire list. With a turnover of 1.3 million kuna, its price fell by 0.19 percent, to 224.58 kuna.

Shares of HT achieved a turnover of around 770,000 kuna, with a price decrease of 0.29 percent, to 208.39 kuna.

“Negative sentiment continued yesterday on the Zagreb Stock Exchange, and trading was thin, lacking significant news that could stimulate investors. There are no significant corporate news today either, but I expect stabilization of the Crobex, as investors may hit the brakes after two days of significant price declines,” says Tamas Nagy, a broker at Erste&Steiermaerkische Bank.

Although Atlantic Grupa proposed a dividend of 9 kuna per share yesterday, it did not result in higher trading volume for that share. With only about 6,000 kuna in turnover, its price fell by 1.5 percent.

Among sector indices, the largest decline was recorded by CROBEXnutris, down 0.74 percent, primarily due to a sharp 5.6 percent drop in the price of Podravka shares.

Meanwhile, the trend of rising stock prices continues on foreign exchanges.

On Wall Street, the S&P 500 and Dow Jones indices reached new all-time highs on Wednesday, thanks to solid quarterly business results from companies and investors’ hopes for strengthening economic activity.

The Dow Jones rose by 0.32 percent, to 15,105 points, while the S&P 500 increased by 0.41 percent, to 1,632 points.

In most Asian markets, stock prices rose this morning, while investors on European exchanges are cautious at the start of today as indices are at their highest levels in several years.

“On Wall Street, indices have reached new all-time highs, and stock prices are rising on other major global exchanges. The question is how long this will last. There is increasing skepticism among investors regarding whether this growth is sustainable, given the not-so-bright situation in the largest global economies,” says Tamas Nagy.

Today, the focus of investors on European exchanges will be the meeting of the leaders of the British central bank. Although central banks have recently been racing to ease monetary policy, no changes in policy are expected from the Bank of England.

Last week, the U.S. Fed announced new stimulus measures if necessary. Subsequently, the European Central Bank lowered key interest rates, while this week, the Australian and South Korean central banks did the same.