The market reacted emotionally to the result of the presidential election, registering significant gains, but the period of volatility is not over, with investors now turning their attention to the formation of a government backed by a solid parliamentary majority, according to brokers consulted by AGERPRES on Monday.

'Investors reacted extremely positively to the result of the presidential election, which comes after a rather long period of uncertainty and volatility caused by that very uncertainty. At this point, we can say there has been a kind of investor release. Trading volumes are increasing, and indeed, the indices opened the morning with 4-5% gains, though those gains have now moderated slightly. But it's clearly a signal from investors, from the entire market, in support of Romania staying on its European path, which is encouraging,' said Estinvest Director General Ovidiu-Lucian Isac.

He stressed that the volatility is not over, and going forward, focus will shift to government formation.

'No, we haven't escaped volatility. We're at the beginning of the road. As we all know, a period of negotiations is coming for the appointment of a prime minister and the formation of a government. I estimate that, depending on how long these talks drag out, volatility will continue. I hope and believe the intensity won't be as high as during the last weeks of the campaign, but we are still in a volatile period, which may also present investment opportunities. For example, on Friday before the runoff, the market rose - proof that some investors bet on this outcome, and fortunately, it was a winning move. It's very important how fast and professionally the talks for government formation are managed because investors hate uncertainty. That's why having a prime minister quickly, with a clear governing programme, is essential - one that can be understood and trusted by both institutional and retail investors, domestic or foreign,' added Isac.

Likewise, Antonio Oroian, broker at Goldring, said Monday's stock market performance is a normal reaction to the election results and recent months of tension.

'Still, I expect this euphoria to cool in the coming days, with focus shifting to big unresolved issues: first, forming a government and then finding solutions to reduce the deficits. So, fiscal-budgetary problems remain, and they could continue to drive volatility. However, what matters most is the direction we're heading in and regaining investor confidence,' he pointed out.

Alin Brendea, market analyst at Prime Transaction, also noted the market's reaction to the election result.

'We must note that the stock market anticipated, at the end of last week, a pro-European outcome by growing over 3%. The appreciation at the beginning of this week continues that rebound trend of the local market, which is approaching its annual highs. The Romanian public's choice to endorse a reconstruction project aligned with European Union values has clearly reversed the growing risk sentiment we've felt in recent weeks toward Romanian financial assets. Both the rise in stock prices on the BVB and the decline in sovereign debt costs confirm this. What lies ahead will certainly not be a smooth road. There are solutions, but implementing them will require unpopular measures and perseverance. In this context, the stock market can at least hope for a stabilisation of the recent negative sentiment, which has decoupled us from the positive trend in European markets this year. In the short term, until a new government with solid parliamentary support is formed, the market will remain exposed to uncertainty and, therefore, volatility. But the political paradigm seems to have shifted, and this change provides a solid foundation for the local market to return to an upward trend in the medium term,' Brendea concluded. AGERPRES (RO - writing by: George Banciulea; EN - writing by: Adina Panaitescu)