The Warsaw Stock Exchange (WSE) posted significant gains on February 23, defying a broader downturn across Western equity markets. The local rally was largely driven by robust domestic retail sales data and relief that a feared US military strike on Iran, which markets anticipated could have occurred as early as February 21, failed to materialise.

“The worst-case scenario from before the weekend, involving a US strike on Iran, has not materialised so far. This was enough for investors to boldly start buying shares on the domestic stock exchange. As time passed, demand grew, with the WIG20 index closing the session almost 1.7% above the line. However, the positive performance of the Warsaw Stock Exchange contrasted with the red colour present on the largest European stock markets,” the Polish daily Parkiet reported.

While the Polish market advanced, most major indices on Western stock exchanges remained under supply pressure, although declines were not overly deep.

“The fears from before the weekend, when investors were gripped by uncertainty over a potential US strike on Iran, have partially subsided. Another round of negotiations between representatives of both countries is expected this week. However, the risk of escalation of the conflict remains quite high,” the Parkiet added.

The pause in geopolitical tensions did not buoy the U.S. market, however, where investors remained anxious about the legal chaos surrounding trade policy following a US Supreme Court decision on February 20. After the court ruled many existing duties illegal, US President Donald Trump announced he would increase to 15% his new global tariff to replace them.

“His latest threats suggest the administration will pursue trade duties by other means, which could result in more volatility for markets. Other questions remain, including whether the administration will refund businesses that paid levies,” the Wall Street Journal noted.

Locally, Polish market sentiment was further bolstered by surprisingly strong retail sales figures published on the morning of February 23 by the Central Statistical Office (GUS). Despite a highly disruptive, cold January that negatively impacted construction and industry, retail sales jumped by 4.4% year-on-year, easily exceeding market forecasts of 3.1%.

“The data itself may also have a positive impact on the results of clothing companies listed on the Warsaw Stock Exchange, as it was sales in the ‘clothing and footwear’ category that grew the most in January. The second beneficiaries may be furniture, electronics and household appliances retailers, as this category has recorded double-digit sales growth for another month,” assessed Stockwatch.pl’s analyst Marcin Kiepas.

Ultimately, the blue-chip index WIG20 ended the day up by 1.67%, while the widest index WIG gained 1.33%.