+ Poland's blue chip index WIG20 rises 3.2%
+ Banks rise as much as 9%
+ Zloty strengthens to as much as 4.4434 to the euro, strongest since late August
+ Hard-currency bond spreads tighten to 125 bps
Below are analysts' reactions to the event.
FRANTISEK TABORSKY, ING, UNITED KINGDOM:
"Exit polls after Sunday's general election indicate a victory for the ruling party, but a majority for the opposition parties. The prime minister has indicated an interest in trying to reassemble the government, but unless the early results change fundamentally, we can expect a change in Poland's leadership."
"We can expect the market to maintain the positive sentiment, which should be positive for Polish assets in general. For now, we see the key level of EUR/PLN 4.450, which will have to be broken on the way down."
OLLE HOLMGREN, SEB, SWEDEN
"A more definitive election result will not be presented until this evening, or maybe even tomorrow, and the current ruling party, Law and Justice, will be the largest party and will thus have the first opportunity to try to form a government. Even if the opposition becomes the largest, it can take a long time to unite all parties on a common policy."
"Poland has hosted over 1.5 million Ukrainian refugees, and it serves as the main hub for the transfer of arms and aid to Kiev. The zloty has been one of the better performing emerging market currencies against the euro over the past month, partly due to expectations of a political change. If the results of the polling station survey are confirmed, the currency should continue to strengthen."
LUKAZS JANCZAK, ERSTE GROUP, POLAND
"The first reaction of the wider market will also be positive. This is indicated by the currency market, where the Polish zloty is strengthening, and it seems that what the investors may assume (...) is that the potential government of the former opposition will have a more open attitude towards the EU. They can expect an unfreezing of National Reconstruction Plan funds, and improvement of corporate governance."
MICHAL KOZAK, TRIGON, POLAND
"Probably the opposition's victory and perspective of forming government in the next few weeks would be very positive news for Orlen. We expect fuel wholesale and retail prices to rebound, which can continue to occur until information of the government's formation. Looking at the medium term, Orlen's shares may rerate, as an effect of the lowering of political risk."
(Reporting by markets team in Warsaw, Gdynia and London, compiled by Karin Strohecker; Editing by Amanda Cooper)