Polish markets extended gains after a full vote count confirmed pro-European Union parties won a parliamentary majority, boosting sentiment and clearing the way for more investment and aid flows.
(Bloomberg) — Polish markets extended gains after a full vote count confirmed pro-European Union parties won a parliamentary majority, boosting sentiment and clearing the way for more investment and aid flows.
The market capitalization of Warsaw-listed stocks jumped 38.2 billion zloty ($9.1 billion) since Sunday’s election, with the broad WIG Index gaining about 6% and the WIG-Bank gauge for lenders advancing 10%. The zloty was the world’s best major currency for a second day on Tuesday.
Investors bet the incoming administration will help unlock funds frozen amid disputes between the EU executive and the nationalists who have governed Poland for the last eight years. Opposition leader and potential future prime minister Donald Tusk called on the country’s president on Tuesday to quickly start the transfer of power, a process which may take several months.
“Stocks, led by state-controlled companies and banks, have gained more than any national index in emerging markets,” said Jakub Cery, an analyst at Erste Group Bank AG. “The anticipated policy shift means that Poland will become more attractive to investors as an integral part of Europe.”
The benchmark WIG20 stock index rose 1.77% by 4:25 p.m. in Warsaw, the highest since mid-August, after jumping 5.3% on Monday. Discount retailer Pepco Group NV, utility PGE SA, aluminum products maker Kety SA and e-marketplace Allegro.eu SA were among the biggest gainers.
The zloty appreciated 0.5% against the euro after yesterday’s 1.9% gain, trading around the highest levels in more than two months.
The Polish currency is also benefiting from an expected tilt away from dovish policies by the central bank. Derivatives show traders are betting on about 30 basis points in rate cuts over the next six months, compared with more than 50 basis points seen last week.
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