Spillover of Global Sentiment onto Domestic Markets

On Friday, three major US indexes fell for a third week in a row because of expectations of higher interest rates and their effect on valuations. Despite the slower pace in accommodating monetary policy in Europe, rising bond yields are suggesting it might be sooner than expected. Therefore, the spillover effect was evidenced on some regional equity markets. Croatian index ended the week flat in its performance (-0.31%), Romanian BET was down 1.7%, while Slovenian index was up 5.5%.

In a situation where higher interest rates are expected, all higher risk and premium assets like high leverage stocks, technology stocks, and cryptocurrency are down while quality stocks are not that much impacted. These riskier assets could continue to be under pressure in the period to come, so their lows might not be realized yet. For the week Nasdaq fell 7.55%, S&P dropped 5.7%, while the Dow lost 4.6%. Within S&P only the consumer goods sector closed in green. It is expected that the risk premium for equities could go up further due to the current situation on the market.

S&P500 Performance [2020-2021]

Croatian index ended the week flat in its performance (-0.31%), as consumer sector heavyweights also closed in green. The best weekly performance was realized by Atlantic Grupa which was up 5.6% WoW and has 11.32% weight in the index. It ended the week at HRK 1,870.00 per share. Podravka, another consumer goods company with 10.6% weight in the index, was up 0.9% ending the week at HRK 696 per share. Another sector that is operating well under rising interest rates is ICT, so Ericsson NT showed good performance and was up 3.2% WoW. The share ended the week at HRK 1,950 per share. Adris preferred was up 0.5% WoW, due to its strong impact on the insurance sector which is achieving strong performance this year. But other hospitality companies due to rising rates and prices of consumer products were quite volatile during the week and ended the week practically flat, Valamar at HRK 34.5 per share and Arena on HRK 300 per share.

CROBEX10 Performance [2020-2021]

SBITOP was up 5.5% WoW, as practically all shares showed strong performance during the week until Friday when the financials came under pressure due to the spillover effect and threat of rising rates. Petrol, the second biggest index constituent with a 23.3% share in the index, was a star and was up 4.9% in its weekly performance. Cinkarna was the second-best weekly performer rising 2.2%, supporting the growth of the index with a weight of 4%. As a reminder, Cinkarna is the highest dividend paying share in the index with last year’s dividend amounting to EUR 21 per share and a yield of 8.9%. You can read more about it here. Romanian BET was down 1.7%, while last week was marked by the OMV Petrol sale of shares in the amount of app. EUR 200m. The shares were sold at an 8.5% discount and if you want to read more about it, click here. OMV Petrom is the share with the third-largest weight in the index, 14.6% while the seller of shares Fondul is the biggest heavyweight with 20.72% of the weight in the index. In the week Fondul is down 5.93%, while OMV Petrom is down 8.72%.

SBITOP Performance [2020-2021]

Category : Flash News

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