The Stock Exchange witnessed its most dramatic decline of the last ten months yesterday, when the BET index lost 4.5% and BET-C, which gauges the performance of all the shares on the market, dropped 4.77%, local Ziarul Financiar reports, under the headline Black Wednesday. The decline came at a time when all the markets in the region registered declines of 2% to 4% when the Bucharest Stock Exchange trading closed, which shows that a number of investment funds that invested on these markets have been selling.

The decline is even more dramatic considering it comes after a very bad start to the year on the BSE, marked by several days of corrections in a row. After yesterday's decline, the BET and BET-C indices were down 16.5% compared with the end of last year, while the SIF index, BET-FI lost almost 19%.

Brokers find it increasingly more difficult to explain why the new corrections on the Stock Exchange, and recommendations are out of the question these days.

"There's nothing we can do. We're sitting and waiting for the internatinoal crisis to pass. There are no calculations you can make at present, because these declines are not up to us. Until the Americans bounce back and investors regain confidence in the capital market there's no hope of a rebound," says Adrian Manaila, manager of brokerage firm Eldainvest based in Galati.

Yesterday's correction on the Stock Exchange, which came with a higher traded volume than registered lately, is due to sales by foreign investors, some brokers believe, given that the most affected were highly liquid shares such as SIFs, banks and petroleum companies, in which foreign funds keep their investments. SIFs lost an average of over 5%, while BRD dropped 5.24%. Petrom (SNP) and Banca Transilvania (TLV) shed 3.8% and 3.6%, respectively.

Other brokers are blaming local investors, and especially speculators, who have been increasingly more active and attempt to guess the market's direction based on the international markets.

"I find it hard to believe that a foreign fund would sell so low at the opening of the session. I'd rather believe it was the big investors on the domestic market that have 5 to 10 million-euro portfolios or the brokers that manage discretionary accounts and correlate the Romanian market with the foreign markets," believes Adrian Caramiha, deputy general manager of Broker Cluj.

The sharper and sharper declines, however, leave some hope for a market rebound. More and more brokers are saying that after these declines shares will reach prices that make them attractive buys.

"These strong declines will lead to higher interest being shown in buying, because some of the shares have reached prices that were unexpected this year," says Marius Veltan, deputy general manager of Carpatica Invest.

Over the last three years, every time such daily declines were registered, a market rebound soon followed, over the short term at least.

The previous comparable decline occurred on March 5, 2007, when BET lost 5.3%. The decline was followed by six sessions of growth, when the Stock Exchange recouped some of its losses, although international conditions were better then.