ZSE: Investors Will Position Themselves Ahead of Company Earnings Announcements

At the Zagreb Stock Exchange , cautious trading is expected at the beginning of the week, with no significant movements in the Crobex index, while investors will look to global markets for new directions and position themselves ahead of the earnings announcements of domestic companies. All analysts who participated in the Hina survey expect stagnation in the Crobex today.

The Crobex index rose by 0.59 percent last week, reaching 2,702 points, marking a gain for the 12th consecutive week. Crobex10 strengthened for the third week in a row, by 0.54 percent, to 1,615 points. Both indices are at new record levels.

Among sector indices, the Crobexkonstrukt saw the largest increase, up 3.84 percent, while the Crobextransport fell the most, down 1.03 percent. However, regular trading in shares has diminished, amounting to 4.1 million euros, which is 1.9 million less than the previous week.

– Positive sentiment continued last week, marking the twelfth week of consecutive growth, and we are in a strong positive series. However, the average daily liquidity was around 820 thousand euros, which is significantly lower compared to previous weeks, indicating the weakest performance in terms of liquidity in the last six weeks – says Davor Špoljar, head of investment analysis at Erste&Steiermaerkische Bank.

As he adds, there are currently no significant corporate news, so domestic investors will monitor movements in global markets.

– It is important to note that we are entering the quarterly earnings season, and in this context, I believe that investors will start to position themselves in certain stocks according to their expectations – notes Špoljar.

The most liquid was the regular share of Končar D&ST, which achieved a turnover of 407 thousand euros, and its price jumped nearly 4 percent to 1,050 euros. This was followed by the share of Zagrebačka Banka, with a turnover of around 390 thousand euros, which increased by 0.54 percent to 18.7 euros, a new record level. Another banking share, HPB, was also in focus, achieving a turnover of 334 thousand euros, with a price drop of 1.9 percent to 206 euros. Significant turnovers above 300 thousand euros were also recorded for the shares of Ericsson Nikola Tesla, whose price weakened by 0.5 percent to 206 euros, and the preferred shares of Adrisa, which decreased by 0.66 percent to 60 euros.

Among the more liquid stocks, the biggest winner was the share of Brodogradilišta Viktor Lenac, with a price jump of 7.74 percent to 3.62 euros, while the largest drop was in the share price of Dalekovod, down 7.8 percent to 2.36 euros.

Last week, a total of 55 shares were traded on the ZSE, with 27 prices rising, 14 falling, and the same number stagnating.

Divergent Movements in the US and Europe Regarding Inflation and Interest Rates

On Wall Street, the Dow Jones weakened by 0.1 percent last week to 38,627 points, while the S&P 500 slipped by 0.4 percent to 5,005 points, and the Nasdaq index fell by 1.3 percent to 15,775 points.

In contrast to Wall Street, stock prices on European exchanges rose last week, with the London FTSE index strengthening by 1.8 percent to 7,711 points, while the Frankfurt DAX rose by 1.1 percent to 17,117 points, and the Paris CAC increased by 1.6 percent to 7,768 points.

– In the US market, indices broke a positive series of five weeks of growth last week, while a positive trend continued on European exchanges. The reason for this divergent movement is that investors in the US market faced stronger-than-expected inflation data, leading to an increase in yields on bonds and other debt instruments and a simultaneous correction in the stock market. Indeed, inflation data ‘shifted’ investors’ expectations for the start of the Fed’s interest rate cuts from May to June – notes Špoljar.

As he adds, in Europe, inflation data from France showed a significant weakening, which provided a boost to European stock markets, particularly in France and the UK.

– Today is modest in terms of macroeconomic and business announcements, and in the remainder of the week, consumer confidence data in the eurozone, data on the US real estate market, and purchasing managers’ indices for several European countries are expected, and certainly, investors will also follow the release of the detailed report from the last Fed meeting – concludes Špoljar.