The Ibex manages to go over the 10,600 points thanks to Telefónica and Inditex

This Tuesday it started strong, boosted by the good close of Wall Street this Monday (Dow Jones: +0.55%; S&P:+0.81%;Nasdaq:+0.98%). In the past session, Republicans and Democrats reached an agreement to reopen the government that gives Congress two weeks to reach a consensus about what to do with the “Dreamers’ (undocumented immigrant children).

BOOST FROM TELEFÓNICA, PRESSURE FROM THE BANK

Back to the Ibex, a very important aspect that has played in its favour was Telefónica. The ‘teleco’ has gone over its 8.42 euros resistance this Tuesday: it has gone up 0.67% and has reached 8.47 euros per share. Also a great figure in the index or a blue chip like Inditex has been key for the boost this Tuesday: It has risen a 0.97% up to 29 euros per share.

Nevertheless, the highest riser has been Inmobiliaria Colonial (+2.12%) followed by the media conglomerate Mediaset (+1.73%) despite being the red lantern last session and Bankia (+1.60%).

Despite the rise of this last entity, it’s true that the bank has an important weight in the Spanish index, it has pressured the Ibex al throughout the session as consequence of the new swing given by the Berenberg analysts.

In fact one of the figures that has suffered most sells has been CaixaBank (-1.24%), only surpassed by ArcelorMittal (-2.12%) and Aena (-0.56%).

On their part, Banco Santander has dropped a 0.40% although it has closed over the 6 euros (resistance at 6.14) and Sabadell has also fallen a 0.42% whilst Bankinter has lost a 0.23% and BBVA a 0.07%.

Therefore it should be pointed out that the earnings of IAG (+1.49%) that have even started to lead the rises in the index this Tuesday after seeing that their offer for the Austrian Niki has failed.

MAIN BOARD AND OTHER STOCKS

Regarding the main board, the rise of a 0.60% from the mediatic group Prisa, owner of ‘Cadena Ser’ and ‘El País’ among others, after announcing a paper avalanche: it will post 469 million shares at a price of 1.20 euros per share with the aim to amplify the capital by a value of 563 million euros.

MásMovil has closed after it being known that Providence Equity Partners (PEP), biggest shareholder of the company has sold 14%of the capital, a package of 2.8 million shares for 245.7 million euros.

Out of the Spanish stocks, the main stocks of the Old Continent have increased moderately although they have also deflated throughout the session like the Ibex. The only European index that has fallen has been the CAC 40, but very slightly (-0.12%). At the close of the Spanish market the New York stocks didn’t show moderate earnings.

MACROECONOMICS

All in all, this Tuesday there will be a meeting with Ecofin, and the January ZEW in Germany has been published (95.2 over the 89.8 predicted). In Japan, the central bank has maintained its policies without changes and has offered a slightly more optimistic vision about the price expectancies, underlining the conviction that the economy is going towards it’s inflation goal of 2%. The BoJ has maintained its rates in -0.1% by 8 votes in favour and 1 against.

Also this Tuesday in Davos (Switzerland) the World Economic Forum starts. Throughout the day Ignacio Sánchez Galán, president of Iberdrola sent a message to the government from Davos and has said “you can’t do politics without energy”. Tomorrow King Philip the VI will appear and Donald Trump will attend on Friday.

Another special date of the session was the appearance of Michel Barnier, the negotiator of the EU for Brexit, in the Congress of MPs. Barnier has reassured that the “UK will assume the costs and guarantees”.

TECHNICAL ANALYSIS

For José María Rodríguez, the technical analyst from Bolsamanía, “the time has finally come for our Ibex”. In his opinion “we can’t let this chance escape of leaving the 10,600 resistance behind”.

“We would want more space with the break with this resistance although we still have three sessions ahead of us to see the close of the week. So a close with space over the 10,600 would be a sign of strength since we would have a double bottom on our Ibex 35”, he adds.

Also he says “the banks on the block are still strong. Here and in Europe”. It’s his belief that “the European banking sector has gone over the 2017 highs and it doesn’t show the resistances of the highs of 2014 and 2015, this is a 15% over the current price levels”.

“For now, after 10 months of a a continuous and slow downwards dripping by Telefónica this Tuesday has marked its first rising high closing, aside of the 8.43 resistance. We would thank a greater show of strength in the surpassing of resistances until Friday”, he concludes.