Ibex still unable to react as Catalan tensions weigh on market

The Ibex 35 is still unable to push on (+0-05%, 10,297 points), and continues to underperform compared to its European neighbours, with the German and French alternatives rising around 0.4%. The Spanish index attempted to move up after measures announced by PM Mariano Rajoy to prevent the independence referendum in Catalonia on 1 October. Banks rebounded on Thursday after a poor performance on Wednesday.

There were disturbances on the streets this morning after yesterday’s arrests, just over a week out from the planned independence referendum. Mariano Rajoy made a declaration on Wednesday night asking for the regional government to desist its operations. Head of the government Carles Puigdemont had already said that this had not been considered. Sabadell and Caixabank rebounded on Thursday morning after significantly falling on Wednesday.

Caixabank led the gains with a rise of 2.4%, followed by BBVA (+2.05%) and Santander (+1.49%). Sabadell was flat.

Abertis was in the news on Thursday after Aena’s main shareholder TCI supported a counter-offer for the concession group.

CATALONIA

Regarding the north-eastern region, analysts at Goldman Sachs gave its recipe for solving the crisis. “In our view, a lasting solution will require greater autonomy to be granted to Catalonia (short of independence), effectively reversing the decisions taken in 2010 limiting the region’s autonomy. Public opinion in Catalonia generally favours greater autonomy, short

of independence. The key risk to this outlook is if political tensions escalate sufficiently to

make progress towards this solution more difficult.”

Spanish economy minister Luis de Guindos said in an interview with the FT that the improvement of Spain’s economy opens new opportunities for dialogue with Catalonia. In his opinion, there is space for a new autonomous financial solution, as long as they abandon their calls for a referendum.

FEDERAL RESERVE

The central bank announced that it will begin to reduce its assets in October, and surprise surprise, left it clear that it intended to raise base interest rates in December. Some believed that inflation and natural disasters affecting the US would lead to the Fed putting the brakes on. But that was not the case.

In forex, the euro was up 0.17% against the dollar. The Fed also revised up its growth foecast from 2.2% to 2.4%.

TECHNICAL ANALYSIS

“Including Thursday the Ibex counts up eight sessions trapped, in round numbers, inside a range understood to be between 10,290 points as support and 10,400 as resistance. In normal conditions, this movement would be broken higher, but little has changed really with respect to what we have been saying session after session for more than a month. We are still in no man’s land, halfway between support and resistance,” said José María Rodríguez, Bolsamanía technical analyst.

“Meanwhile, the rest of Europe keeps increasing the gap between us and them. Our neighbours are heading towards record highs of July. We have Banco Santander at the resistance zone, which makes it all the more surprising.”