Smooth rebound of a volatile Ibex wary of the coronavirus and central banks

In the last sessions, the selective was as harshly punished as the rest of the European indexes, with a weekly drop of almost 12%, while Wall Street closed its most bearish week since 2008. Panic seized the markets due to the coronavirus spread worldwide.

Covid-19 has spread to about 60 countries, although in China the number of new infections and deaths is in clear decline, with about 40 deaths in the last hours and just over 200 infected.

The outbreak has killed 2,900 people and infected at least 80,000 in China. In the rest of the world, the US has reported its second death from the disease and those affected continue to grow in South Korea, Italy, Iran and in Spain (around 120).

Among the most punished values we find the IAG airline, which has collapsed 11%, being one of the titles most affected by this crisis, which has sunk more than 30% its value in the stock market. Also -3% and over for Bankia, Santander and Aena.

In positive, we highlight the rise of MásMóvil. Its rebound takes place after the acquisition of Lycamobile Spain. Cellnex, Ferrovial and Iberdrola have been other bullish values ​​of the day.

In economic matters, China's industrial activity has plummeted in February to 40.3 from 51.1, according to the PMI Caixin of manufactures, well below the expected fall to 45.7. In Europe, manufacturing data has not yet been affected, but the forecast is that the activity will slow down strongly in March.

In addition, the Bank of Japan (BoJ) said Monday that it is closely reviewing the outbreaks of the coronavirus and, through an emergency statement, has pledged to provide ample liquidity in the face of signs of uncertainty in global financial markets. Vice President of the European Central Bank (ECB), Luis de Guindos, stressed that the Governing Council of the monetary authority is "prepared" to adjust all its instruments if the expansion of the coronavirus ends up affecting inflation.

In addition, Brexit will also once again occupy a prominent place in the minds of investors, as a new round of negotiations between Brussels and London begins to define the country's future commercial relationship with the European Union (EU) after the divorce.

In other markets, Brent oil picks up 1.7%, up to $ 50.54, in anticipation of an additional production cut by OPEC. In addition, the ounce of gold rises 2.2%, up to $ 1,602, in a search for refuge assets.

The euro rises in value 1%, up to $ 1,1136, as investors consider a rate cut by the Federal Reserve (Fed). Finally, the profitability of the 10-year Spanish bond rebounds slightly to 0.29%.

TECHNICAL ANALYSIS

"The volatility is extreme and it has come to stay. This morning our Ibex rose above 2% to fall by mid-session in the same percentage. This movement is normal after a 'crash' like the one experienced last week and this volatility will be what we expect for the next few weeks, "explains Jose María Rodríguez, an analyst at Bolsamanía.

"The normal thing is that we are at the gates of a rebound that can last several weeks, with its significant falls in between (reaction phases). But somehow the collapse from the February highs of 15% should be adjusted proportionally, in the same way that we say that within an upward trend and after rising strongly we need prices to correct. Action-reaction phase, "adds this expert.

"And the normal thing is that after a more or less sustained rebound in time the corrections arrive again with the objective of falling in the minimum of the current corrective phase. In the short term we have an important support in the area of ​​approximately 8,500 points, which is where the straight line that joins the growing lows of December 2018 and last August passes", concludes Rodríguez.