On Wednesday, stock markets could not hold up under their own weight and the correction continued after recent growth. However, U.S. indexes declined only 0.5%, while the S&P 500 held above 1,400 points. At the same time, such protective assets as U.S. treasuries even failed to demonstrate growth by the end of trading.
We note that shares in industrial and commodity companies – the sectors focused on the so-called “Chinese economic miracle” are underperforming other stocks. Shares in these sectors are outsiders, as has been the case this week and for a month already; in fact, it has been like this since worse-than-expected Chinese economic data was released.
Against this background, the Ukrainian market lost morning gains by the end of the day; however, the most interesting events took place for individual issuers. Thus, in the aggregate, the trading volume for Centrenergo (CEEN: UNDER REVIEW), Motor Sich (MSICH: UNDER REVIEW), and Ukrtelecom (UTLM: UNDER REVIEW) exceeded UAH 40m, which is extraordinary.
It is obvious that some market participants see the correction on global exchanges as a temporary phenomenon, and growth of the Ukrainian market, as something more long term. Of course, this is only one interpretation and it may or may not prove to be trustworthy. At the same time, such events most likely speak about the risks associated with opening short positions in the short term.
