WIG-Ukraine index falls nearly 7% amid growing pessimism over peace prospects
The WIG-Ukraine index of Ukrainian stocks on the Warsaw Stock Exchange (WSE) dropped another 6.88% on Wednesday to 531.24 points, following a 3.36% decline on Tuesday in the first market reaction to a conversation between U.S. President Donald Trump and Vladimir Putin. The continued selloff reflects mounting pessimism over the prospect of a swift peace deal and waning U.S. support for Ukraine in the ongoing war.
According to WSE data, shares of Astarta, Ukraine's largest sugar producer, fell by 7.76%. Agricultural holdings with land near the front line – IMC and Agrogeneration – saw their stocks decline by 3.30% and 7.48% respectively. Milkiland dropped 2.28%, KSG Agro slipped 0.32%, while Coal Energy, whose mines are idle due to the war, surged 4.71%. All of these stocks are part of the WIG-Ukraine index basket.
The only stock to rise was that of Kernel, Ukraine's largest sunflower oil producer, which gained 1.54%. However, Kernel shares are not part of the index due to their low free float.
The performance of Ukrainian equities on the WSE sharply underperformed the broader Polish market on Wednesday, with the main WIG index down 0.95% and the WIG40 slipping just 0.22%.
On the London Stock Exchange (LSE), where retail investors have less influence than on the WSE, shares of MHP, Ukraine's largest poultry producer, edged down 0.36%, while mining company Ferrexpo dropped 5.23%.
Ukrainian eurobonds also lost ground on the Frankfurt Stock Exchange, declining by 0.5% to 1.7%. The 2029 bonds were quoted around 62.72% of face value, and the 2036 bonds at 48.57%. Meanwhile, GDP warrants fell 0.1% to 74.53% of their notional value.
As reported, the WIG-Ukraine index plummeted from 574.37 points to 361.98 points on the first day of Russia's full-scale invasion, February 24, 2024, and dropped below 200 points in May 2024. Following Trump's electoral victory last fall, the index initially climbed from around 240 to 350 points. From mid-February, on news of peace talks, it surged to 640-650 points. However, as optimism about a quick agreement faded, the index fell to 508.45 points in early April.
By the end of the week before last, on news of improving U.S.-Ukraine relations and Russia's announcement of a temporary ceasefire, WIG-Ukraine rebounded to 590 points. After plans for negotiations in Istanbul and prospects for a longer-term ceasefire were announced, the index nearly reached 625 points early last week before retreating again as hopes for a swift resolution to the war diminished.
