Warsaw markets head down sharply, tracking US-led global tumble

Warsaw markets head down sharply, tracking US-led global tumble

	Published : Thu, 16 Aug 2007 10:59 By : Agencies Print this Story

WARSAW (Thomson Financial) - Warsaw markets fell sharply at midday, with the blue-chip index hitting its weakest levels since March and the zloty dropping to a two-month low, following an overnight equity sell-off in US and Asia.

By 1130 CET Warsaw bourse's main indices - the broad-based WIG and the blue-chip WIG20 - were down by 5.3 and 4.05 pct respectively, with 9 in every ten stocks taking a fall. The zloty was trading at 3.8283 zlotys to the euro - its lowest since June 7.

Central banks worldwide failed to quash investors' jitters with billions of funds supplied to banks over the past week to make cash available for lending and keep interest rates stable, amid signs that credit was drying up. The US Standard & Poor's 500 index is now down for the year.

'We have had major tumbles around the globe for two days and Poland is not the one to buck the worldwide trend,' said Tomasz Ossig, broker at ING Securities in Warsaw. 'The worst could still be ahead of us, as people may start redeeming money from the local mutual funds.'

All WIG20 components were down on the day, led by the bourse's major players: Poland's largest telecom TPSA, its two biggest banks PKO BP and Pekao, its largest oil refiner PKN Orlen and Europe's biggest copper miner KGHM.

Poland's only biotech company Bioton was the hardest-hit with a 18 pct fall after lacklustre results.

The bearish sentiment also weighed on the Polish currency, as investors reduce risk in fear of further and wider falls, economists say.

'In the scope of the next few weeks, you have to take into account that the zloty may fall further as uncertainty on the global markets prevails,' said Piotr Kalisz, senior economist at Citibank Handlowy in Warsaw.

adrian.krajewski@thomson.com +48 22 447 2430

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