(Reuters) -Polish equities slipped on Monday after nationalist opposition candidate Karol Nawrocki won the second round of the country’s presidential election.
According to the data from the electoral commission, Nawrocki secured the presidency with 50.89% of the vote in the second round held on June 1, defeating Rafal Trzaskowski, the liberal Warsaw mayor and an ally of the government led by Donald Tusk, who garnered 49.11% of the vote.
Poland’s blue-chip index WIG20 was down 2.14% at 0712 GMT.
Analysts have said that Nawrocki’s win will likely bring more uncertainty for the markets as he is expected to continue the policies of his predecessor, also an ally of the largest opposition party.
“The president is not from the same political camp, meaning he will likely block (government’s) initiatives, so this is not a good situation (for the market),” Robert Maj from Ipopema Securities said.
While Poland’s parliament holds most power, the president can veto legislation.
“It is likely that Nawrocki’s win represents the biggest challenge to Donald Tusk’s Government,” Erste Group analyst Jakub Szkopek said in a note ahead of the market open.
Szkopek added that banks, especially state-controlled, are seen as a “high-risk” sector given the growing budget deficit. He also said foreign investors might shun the Polish stock market for some time.
The benchmark index, which as of Friday’s close was up 26.5% YTD, shed 1.2% on the session after the first round of the election, in which Trzaskowski took a narrower than expected lead.
It had slipped some 0.9% since the first round.
(Reporting by Julia Kotowska and Marta Maciag in Gdansk Editing by Milla Nissi-Prussak)
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