In recent weeks, the stock market has been volatile. Chiefly caused by the Russian invasion of Ukraine, many investors panicked and sold shares. But as we enter April, it seems that a stock market recovery is in progress.
While the bottom of the dip may have already passed, is there still time to buy shares at a knock-down price? I think there is. Let’s take a closer look at recent market volatility and what may be coming next.
Is a stock market recovery on the cards?
The military escalation in Ukraine sent shockwaves through global financial markets. During the initial stages of the invasion, the FTSE 100 fell 6.7%. Since 7 March, however, it has rebounded 8.1%. It is still up 11.9% in the past year.
UK-listed firms with interests in Russia and Ukraine were hit particularly hard by the market sell-off.
The share prices of businesses like Petropavlovsk, Evraz, and Polymetal International all collapsed in a very short space of time. This is mainly because of the prospect of Western sanctions impacting operations.
Aside from Evraz, which is currently suspended from trading, all the other companies with interests in the region have rebounded.
Petropavlovsk is up 100% in the past month, but still down 85.6% in the past year. Similarly, Polymetal is up 59% in the past month, down 81% in the past year. They currently trade at 3.7p and 179p, respectively.
Given the strong monthly rebound, a wider stock market recovery appears to be in progress.
Why it’s not too late to buy
With a stock market recovery potentially close, I’ve found two battered stocks I could buy soon.
Wizz Air, a Hungary-based short-haul airline, is down 41.9% in the past year. In the last three months, however, it is up 31%. It currently trades at 2,962p and many more countries are beginning to remove all pandemic-related entry restrictions in time for the Easter holidays.
For the three months to 31 December 2021, the airline carried more than triple the number of passengers compared to the same period in 2020.
With a more favourable environment for airlines, I think the Wizz Air share price could rise further and that there’s still time for me to buy during this dip. With rising oil prices, however, the cost of jet fuel may eat into future balance sheets and earnings.
Iron ore company Ferrexpo is another option I’m considering. Its share price is down 48% in the past year, but it is up 12% in the past month and currently trades at 192.3p.
As it operates in Ukraine, there is always the possibility of operational disruption if the war further escalates.
Iron ore production increased 18% for the three months to 31 December 2021, quarter on quarter. Furthermore, it had a net cash position of $117m at the end of the 2021 calendar year, up from $4m in 2020.
Overall, there does appear to be a stock market recovery in progress. Both Wizz Air and Ferrexpo have strong underlying businesses and their yearly share price performances indicate there’s still time to purchase shares during this dip. I will be buying shares of both soon.
