Can the euphoria in global markets lift the Crobex as well?

While euphoria reigns in global markets following the Fed’s decisions, the Zagreb Stock Exchange is expected to continue the stagnation of the Crobex today, as there are still no encouraging news from the domestic economy.

Of the 7 analysts from brokerage firms who participated in Hina’s survey, 5 expect stagnation of the Crobex today, while 2 expect an increase.

The Crobex index strengthened by 0.09 percent yesterday, to 1,820 points, while the Crobex10 weakened by 0.21 percent, to 1,026 points.

Regular trading in shares amounted to 10.11 million kuna, approximately the same as the day before.

The highest turnover was achieved by the shares of Ericsson Nikola Tesla, at 1.8 million kuna, with its price weakening by 0.15 percent, to 1,485 kuna.

Million kuna turnover was also achieved by the shares of HT, Adrisa, and Privredna banka (PBZ). Meanwhile, HT’s shares weakened by 0.54 percent, to 176.15 kuna, while the price of Adrisa’s preferred shares stagnated at 264 kuna, and PBZ’s at 441 kuna.

“Crobex indices stagnated yesterday, as there are still no significant economic news to stimulate investor activity. Despite ‘not so bad turnover’, Crobex has been sliding for some time, so it is down 1.1 percent since the beginning of the month,” says Tamas Nagy, a broker at Erste&Steiermaerkische Bank.

In business news, Viro has called an extraordinary shareholders’ meeting for October 28, where it will propose an increase in share capital.

It is proposed that almost the entire retained profit from last year, amounting to 138 million kuna, be converted into share capital, which would increase to 387.6 million kuna. This capital increase would be carried out without issuing new shares, by increasing the amount attributed to each existing share of the company, thus maintaining the relationships between shareholders unchanged.

In foreign markets, however, euphoria has taken hold, following the decision of the U.S. Fed not to reduce the stimulative monetary programs that have been the main drivers of stock price growth for years.

On Wall Street yesterday, the Dow Jones jumped 0.95 percent, to 15,676 points, and the S&P 500 index rose 1.22 percent, to 1,725 points, marking their highest levels in history.

Until the Fed’s decision, stock prices were in the negative, but after the U.S. central bank announced that the programs for purchasing government and mortgage bonds, worth 85 billion dollars per month, would remain unchanged, stock indices surged.

By keeping the extremely loose monetary policy unchanged, the Fed pleasantly surprised investors who expected a reduction of these programs by 10 billion dollars per month.

Thanks to this, stock prices are rising this morning on Asian and European exchanges.

– The strong growth of the indices is influenced by the Fed’s decision to continue monetary incentives at least until the end of the year. Many investors speculated that a gradual reduction of incentives would begin, and of course, they are now in a good mood – says Nagy.

However, he notes that such a decision by the Fed has its downside.

– The Fed has extended incentives while also reducing its growth forecast for the U.S. economy this year from 2.3 to 2 percent. Financial markets will certainly react positively today, and then we will see – Nagy states.

New guidelines for investors could come today from the Swiss central bank’s decision on interest rates, as well as new data from the U.S. real estate market.

– Despite the strong growth of foreign exchanges, there will likely not be stronger reactions in the domestic market today – concludes Nagy.