Ibex takes a breath and rebounds 1.3% amid decreasing tension in Catalonia

Donald Tusk’s words provoked the regional president to take a step back, which alleviated the extreme tension between Catalonia and Spain. This was reflected in the rise in the Ibex as it outperformed the rest of its neighbours in Europe.

However political tension remains elevated, now that the government has sent the formal request for clarification on independence. It is the first step to activate Article 155 in the constitution, which could end with a suspension of autonomy for the region.

STOCKS

On Wednesday, Siemens Gamesa was the best performer and continued its bounce upwards by 4.08% to 12.76 euros, after Goldman Sachs analysts recommended ‘buy’ on the stock.

Endesa, the energy firm with most exposure to Catalonia, rose 2.48%. There were also gains for Acerinox (+2.88%), Colonial (+2.44%), BBVA (+2.43%), Telefónica (+2.3%) and Iberdrola (+2.20%).

On the negative side, only three stocks finished lower. DIA was down 2.03% and led the losses, after JPMorgan cut its target price to 4 euros from 4.30. Tecnicas Reunidas was down 1.87%, followed by Mapfre with a drop of 0.62%.

In the general stock exchange, Amper (+2%) and Grupo Empresarial San José (+11%) were the most profitable stocks, while Vidrala (-3.7%) and Parques Reunidos (-2%) led the sales. In the debt market, prime risk in Spain fell more than 4% due to the lessening tensions in the north-east. 10-year spanish bonds also fell to 1.66% from 1.68%. In the forex market, the euro rose 0.34% to $1.1848, while in commodities, Brent crude fell 0.2% to $56.50.

OTHER NEWS

Away from Catalonia and Spain, the UK retained the attention of investors. PM Theresa May said on Tuesday that an agreement with the EU to ensure the rights of immigrants post-Brexit is very close. Meanwhile, SNP leader Nicola Sturgeon said Brexit had strengthened the case for a second independence referendum for Scotland.

US President Donald Trump is in Pennsylvania to discuss his tax reform, which is expected to reduce corporation tax to 20%. Trump also met with several officials to discuss the threat of North Korea.

In today’s calendar CPI in Spain rose to 1.8%, while Federal Reserve minutes will be released.

TECHNICAL ANALYSIS

“Despite the significant gains on Wednesday, there is little new to be seen in the graph. At least we have left an interesting gap that while is not closed does leave an important opportunity to attack the resistance of 10,410 points,” said José María Rodríguez, technical expert at Bolsamanía.

“Although little by little the upper part of the lower channel, now at 10,450 points, is coming close to this level of 10,410 points. As a result, it can be said that the control zone we have between 10,400 and 10,450 points.”