The Ibex 35 has collapsed after the decision of the European Central Bank (ECB) not to lower rates and it has sunk 14.06%, to 6,390.90 points, in the worst session in its history. When Brexit was approved on July 24, 2012, it fell 12.35%.
- 11.611,100
- 0,75%
The ECB has also announced an additional 120 billion QE and additional funding. All this in the midst of distress, in the world in general and in the markets in particular, due to the spread at a tremendous speed of the coronavirus.
Donald Trump has communicated that he suspends all flights from Europe to the United States to try to stop the outbreak. Italy closes all shops today, except pharmacies, parapharmacies and supermarkets. The World Health Organization (WHO) has already declared the outbreak "pandemic" and fear among citizens is growing. In Madrid, the Community has asked the elderly and the people who care for them not to leave home as much as possible.
All in all, the Wall Street bump from last session does not seem to have an end and at this time on Thursday it is plunging 8%. A very similar situation has been experienced in Asia, Australia fell 7%.
"In recent weeks we have seen interest rate cuts in the UK, the US, Australia and Canada, so the ECB is likely to keep up with the pack to help the euro become competitive. It is possible that the ECB will copy the Bank of England and examine a financing plan to help smaller companies, "said David Madden, an analyst at CMC Markets in London, early in the morning.
Link Securities analysts list this Thursday in their daily report the number of measures being taken to contain the virus - in the world of sports, the NBA has suspended the season after a player tested positive and the Spanish soccer league has also been suspended-, and they recognize that "the reality is that significant losses are going to be caused to many companies and to the economy as a whole."
From Link they foresee that these losses are temporary, however, like most, their scope is unknown. "It is precisely this inability to assess the short-term macroeconomic scenario and its potential impact in the medium / long term that is causing panic among many investors, who are choosing, in the face of uncertainty, to drastically reduce their risk positions "they comment.
IBEX 35 ANALYSIS
"The Ibex has already fallen by 35% since the February highs and a little over 20% so far this week. As we warned in recent days, the drilling of the support (now the first resistance) of the 7,600 points left the doors to a fall towards the area of 6,700 points and below, although it is hard to believe, the 5,900-6,000 points. And it can be said that we are already at the gates of the support that we have in the 2012 lows "explains José María Rodríguez, analyst at Bolsamanía.
"With the current volatility, it can be said that, unless Wall Street begins to recover positions strongly this afternoon, the normal thing is that tomorrow we will continue losing positions down to 5,900-6,000 points. And cross our fingers so that it stops there" , adds this expert.
"To give us an idea of where we are, look at the volatility index or fear index, the VIX, which this Thursday has touched 69.26 points. At the moment of greatest panic in history, in the financial crisis In 2008, this index peaked at 79.43 points. This means that at the moment, we are facing the second highest level of panic and stress in the history of the stock markets, "concludes Rodríguez.
