One of the highest inflations in Europe, sagging industrial production, over 50 bln euro sovereign debt and the recent bleak forecasts on the evolution of local currency are only few of the latest alarming reports that spread clouds over the local economic landscape. Nevertheless, BSE marked solid gains in the recent sessions on the revival of international markets.

What lies behind the recent stock market trend?

The evolution of the stock market over the past two weeks seemed like it defied all the negative news dawning from the Romanian economy. Although the predictions on the local currency and inflation had showed no encouraging signs, BSE attuned to the evolutions of mature markets and responded to different internal factors. Thus, in the past 14 sessions, only five have seen minor declines, in contrast with the relatively recent collapses.

Experts polled by Wall-Street said the turnaround is normal after the sharp dive in the first two months of the year, and that it was tied up to the global context.

“The significant gains in the past few days were tightly connected to external market’s increases, but also to internal factors, such as the changes in FIC’s balances, the waiting for dividend payout for certain companies and the easing of uncertainty on Romania’s economy after the agreement concluded with the international institutions. The bullish came as a normal response, after the sharp declines in January and February”, said Gabriel Necula (photo), broker at Prime Transaction.

Ovidiu Fer from Czech-based Wood&Company said the general sentiment improved after positive news coming (rumors from Citigroup), from the banking sector had piled up.

Alin Cucos, analyst at Estinvest Focsanisaid said the reasons for the bullish to regain its upper hand consisted mostly in technical factors, more like a rampant wave in a bear market.