Polish markets slide as Russian drones breach airspace and NATO reacts
Photo: The zloty depreciated because of the attack of Russian Shaheds (Getty Images)
Polish shares decreased together with the national currency after the NATO country shot down several Russian drones that flew into its territory last night, according to Bloomberg.
The WIG20 index in Warsaw fell by 2.6%, which became the biggest drop in the last two weeks. Later the decrease shrank to 1.3% as investors decided that the intrusion into Polish airspace would not lead to long-term consequences.
The zloty weakened by 0.5% against the euro to 4.268 zloty. This became the biggest daily drop in three months.
"I see the current declines in reaction to geopolitical risk as more of a temporary phenomenon," said Andrzej Bieniek, investment director of the Esaliens TFI fund.
"The government wants to demonstrate decisive action, hence the emerging solutions that are provoking strong market sentiment."
Reaction of Poland and NATO
According to the authorities, at least 19 drones intruded into Polish airspace during another large-scale Russian attack on Ukraine. In Warsaw this was called “an act of aggression.”
Prime Minister of Poland Donald Tusk stated in parliament that the country appealed to NATO with a request to apply Article 4, which provides for consultations regarding a military response. He added that more support is necessary for the defense of the eastern flank of the alliance.
Investor sentiments and pressure on markets
For investors, these events again marked geopolitical risks after a successful start to the year. Despite the fact that the WIG20 index from the beginning of 2025 increased by 27%, in recent weeks sentiments worsened because of government plans to introduce an additional banking tax to stabilize the budget.
"The hopeful optimism at the beginning of the year about a potential peace dividend in the CEE region is now firmly in the rear view mirror," noted Adnan El-Arabi, manager of the Barings Emerging EMEA Opportunities fund. "Timing could also weigh on sentiment after the Polish government announced additional taxation on the Polish banks."
Among the biggest falls in the WIG20 index on Wednesday were the shares of Alior Bank SA and PKO Bank Polski SA.
Previously, Russian combat drones of the Shahed type on the night of September 10 violated Polish airspace.
NATO refused to consider the intrusion of Russian unmanned aerial vehicles into Polish airspace as an attack.
