The stock market reacted positively to the decision of the Romanian Constitutional Court to annul the entire electoral process of the presidential elections, but brokers argue that volatility will continue to be high in the upcoming period.
At 5:20 PM, the BET index, which shows the evolution of the most liquid 20 companies, was up by 3.17%.
"The initial reaction after the CCR decision was euphoric, with investors probably interpreting that the most pessimistic scenario had been eliminated. However, the fact that there is such a strong reaction to any information that appears shows how unstable the situation is, and I believe that volatility will continue to be high in the next period," said Antonio Oroian, a broker at Goldring, to Agerpres.
Similarly, Ovidiu-Lucian Isac, CEO of Estinvest, stated that the market reacted strongly positively after the CCR decision. He mentioned that in the upcoming period, until the end of the electoral cycle, we might witness intervals of volatility.
"The news of the resumption of the presidential elections with a new first round triggered a strong buying reaction on the local stock market. There was a growth trend from the beginning of the trading session, but it suddenly intensified when this news was made public. The increases were widespread, with all BVB indices rising by over 3% an hour before Friday's session closed.
At this moment, the stock market decline compared to the level before the first presidential round has become minor, around 2%. The market seems to credit with minimal chances, in this new situation, the hypothesis that generated significant declines over the past week regarding the possibility of Romania deviating from its European course and security alliances it is part of.
However, the context remains one of high political uncertainty, which will maintain high volatility in the stock market," said Alin Brendea, a stock analyst at Prime Transaction.
On Friday, the Constitutional Court annulled the first round of the presidential elections. The 9 judges decided unanimously after a 5-hour session.
The electoral process will be fully resumed, and the Government will set a new date for the elections.