All major indexes on the Warsaw Stock Exchange (WSE) reacted to the US-Israel attack on Iran with mild declines of slightly more than 1% on March 2. Conversely, shares in the oil firm Orlen rose by more than 5% as investors braced for high margins within the industry, whilst defence-focused stocks also saw gains across the board.

Orlen’s share price gained by 5.09% to PLN120.5 (€28.4), whilst the blue-chip index WIG20 closed the day down by 1.09%, recovering from a fall of more than 2% in midday trading.

The attack on Iran caused oil prices to soar, increased risk aversion, and raised questions about the impact of the current geopolitical situation on the global economy, according to Marcin Kiepas, an analyst with the portal Stockwatch.

The rise in oil and gas prices following the attack on Iran is translating into increases in the share prices of Orlen and the small-cap fuel trader Unimot, Kiepas noted.

“Both are leaders in their respective indices: Orlen in WIG20 and Unimot in sWIG80. This is a natural reaction, as investors expect higher margins and thus higher profits. The question is whether, in the case of Orlen, there will be political pressure on the company to maintain fuel prices,” Kiepas wrote.

The situation in the Persian Gulf region has become a natural catalyst for share price increases in the broadly defined arms sector, though there are only a few small companies from this branch on the Warsaw bourse. The shares of Lubawa, a textile maker supplying the Polish army amongst others, rose by 3.02% on the day to PLN9.88 (€2.3). Shares of the containers producer Zremb-Chojnice went up by 2.55% to PLN11.26 (€2.7), and the share price of the defence equipment and ammunition maker Niewiadów, listed on the alternative NewConnect market, was up by 2.61% on the day to PLN19.68 (€4.6).

At the same time, the geopolitical situation proved disadvantageous to tourism and aviation companies. The share price of Rainbow Tours plummeted by 7.14% to PLN147 (€34.7), and the share price of charter air carrier Enter Air went down by 4.26% to PLN60.7 (€14.3).