Stocks see correction in September as volatility returns to capital markets

Stock indices posted sharp declines in September, sending most international equity markets into correction territory at the end of the first 9 months as investors’ fears about rising interest rates and the possibility of a recession in developed markets gain momentum, according to a Bucharest Stock Exchange (BVB) report.

Total return indices, which also include dividends, ended the first 9 months with a double-digit dip: -10.5% for BET-TR in Romania, -11.7% for S&P500 in the USA, -18.2 % for the STOXX600 in Europe.

In Romania, a better comparative evolution in relation to other international indices was possible after the BET-TR index reached a new all-time high in August.

The investment activity intensified in September on the Bucharest Stock Exchange (BVB): more than 140,000 transactions, the second-highest monthly value so far this year.

“The investors raised an important alarm signal in September in most international capital markets, not only in Romania. The return of volatility in the markets after a calmer level of trading in the summer months brings with it new trading opportunities. Romania was more resilient than other developed capital markets in this complicated international context. We are witnessing a wave of negative data that has led to a deterioration in investment sentiment, especially after it became clear that central banks will raise interest rates, leading some investors to expect an economic slowdown,” said Radu Hanga, BVB President.

Adrian Tanase, BVB CEO added:  “The energy and financial sectors hold an important weight in the capital market in Romania, and it is precisely this structure specific to our market that mitigated the negative investment sentiment manifested at the level of other international indices. We expect volatility to manifest itself in the capital market in the last quarter of the year, but the level of amplitude cannot be estimated. That is precisely why, for individual investors, the best strategy is to set a longer investment horizon, and for companies, it is an opportunity to take advantage of the mechanisms made available by the capital market.”

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