The bank leads the falls and drags down the Ibex before results and the BCE meeting

The bank has lived a black day on the stock market and has once again led the selective to the red numbers. This Monday, the Ibex 35 has yielded a slight 0.08% and closed at 9,163 points. While investors expect the avalanche of business results of Spanish companies (which starts on Tuesday) and the meeting of the European Central Bank (ECB) on Thursday they will not be the only references this week.

This is probably the most relevant week of the summer in the markets before the start of August and the calendars are almost empty. Throughout the next five sessions many things will happen and all of them will have relevance for the stock markets. But at the moment, the European indexes have started the week between the slight falls and the slight increases.

Within the Ibex we highlight the strong increases of ArcelorMittal (+ 2.3%) on the eve of China imposing tariffs on stainless steel from the EU, Japan, South Korea and Indonesia. On the negative side we find the banking sector.

Bankia (-4%) closed today at levels not seen since the Brexit (1.90 euros); Bankinter (-3.9%) and Sabadell (-3.70%) that Sabadell quotes at only 4% of its historical lows. Merlin Properties (-1.3%) has also fallen with desire.

A WEEK OF INFARCTION

Between Monday and Thursday there will be a political debate in Spain to consider whether to vote in Pedro Sánchez as the leader of the country. Things have changed a lot since last week and everything seems to indicate that there will be PSOE-Podemos Government. Pablo Iglesias, the main obstacle to an agreement between the parties, has been cast aside and there is already talk of a government that includes Irene Montero or Pablo Echenique. This issue is going to be crucial in Spain and, although local politics don't usually influence the stock market, we will have to be very careful because there will be an impact if there is a government or if the vote is postponed and even if new elections are called.

This Monday, the trial for the Bankia IPO has returned to the center stage. The predictions have been fulfilled and the Prosecutor's Office has raised Rodrigo Rato's penalty to eight and a half years for fraud and accounting falsification. He has also accused Olivas, Norniella, Durá, Sánchez Barcoj and Celma of accounting fraud.

On Tuesday, the results season starts unofficially in Spain with Banco Santander. Virtually all listed banks will publish their figures between this week and the next. On Thursday we will see Bankinter results and on Friday, Sabadell and CaixaBank. Telefónica also publishes figures on Thursday, and during the week we will also know the results of Repsol, Iberdrola, Acerinox or Naturgy, among others.

Tuesday is also the day on which the Theresa May's replacement in the United Kingdom will be known. Everything points to the imposition of Boris Johnson, who faces many obstacles to achieve his goal: that England leaves the EU regardless, before October 31.

On Thursday the ECB meeting is held and the market is expectant to see to what extent the central bank intends to react to stimuli. What Mario Draghi says will be crucial, also for the evolution of the banks, to whom the turn in global monetary policies is not funny. On Thursday, the second vote of the debate will take place in Spain.

In the midst of all this, the volatility in oil prices continues. The barrel of West Texas, reference in the US, adds 0.7% to 56 dollars. Meanwhile, the Brent, benchmark in Europe, advances another 0.7% to $ 63 per barrel. It should be remembered that both recorded accumulated falls of 7% and 6% in the past week.

Oil is advancing on Monday as tensions return to the Middle East after Libya announced the closure of one of its largest oil rigs and amid the tensions between US and Iran that continue to grip the region, even more so after the Iranians captured a British tanker in the Strait of Hormuz.

TECHNICAL ANALYSIS

"The same as always", the banks again ballast at the Ibex, explains the technical analyst at Bolsamanía.com, José María Rodríguez. The specific rebounds aside, "there is nowhere to grab at, and the worst of all is that it seems like we're in it for the long run, without the banks we can't begin a climb":

Last week we confirmed the drilling of the support of 9,200 points and now we have nothing until the 9,120 points and below 9,060 and 8,900 points. "This last price level is the key support to be respected at all times if we do not want to have a clear and worrying deterioration of the current price structure."

And above, the 'famous' 9,410 points are already very far away. By values, the biggest falls this Monday are for Bankia and Sabadell, with falls close to 4%. The weakness is such that the Bankia minimums this Monday correspond to the Brexit minimums (summer of 2016) and Banco Sabadell quotes only 4% of the historical lows reached in February, at 0.8228 euros.

"It is a continuous drain on the banks and what is worse ... we can't see the bottom yet" concludes the expert.