Ibex 35 minimises losses and remains close to 10,700

The Ibex 35 ended its second consecutive day lower (10,699.6 points, -0.71%), a sequence which brings it to levels last seen in the middle of May before Emmanuel Macron’s victory in French elections. Practically all stocks were on the red today, aprt from Caixabank (+1.15%), Grifols (+0.69%) and Abertis (+0.52%).

With regard to the fallers on Thursday, Mapfre fell 2.98%, ArcelorMittal 2.77%, and Acerinox 2.42%. As many as eight firms fell more than 2%, including IAG, Repsol, Indra, Telefonica and DIA.

In the general stock exchange, Pescanova was 44.99% higher, San José by 21.30% and OHL by 10.47%. Service Point however fell 37.23%, Quabit 5.78% and Aperam 3.88%.

Barclays analysts reduced the telecoms company’s target price from 9.3 to 9.1 euros. The British bank lowered its forecasts for revenue and profit for the period 2’17-19, with a reduction of 2% and 3% respectively.

The Federal Reserve raised interest rates to between 1% and 1.25%, as was expected. It is the third increase in the price of money in barely six months.

The Fed meeting revealed projections of its members, who affirmed that there was the potential for another rate rise before the end of 2017. Eight of its members see the end of 2017 with one more rate increase, while the other eight members are torn between no further increases and two more. For next year the board projects three rate raises, potentially bringing the level to 2-2.25%. US unemployment data will also arrive on Thursday.

After the announcement, the three main indices in New York were sent lower, although the Dow Jones did turn it back around towards the end of the session to rise 0.22%. The Nasdaq and the S&P 500 registered losses during the session of 0.41% and 0.10% respectively. At the close of trading in Europe, Wall Street was down 0.8% on average.

The Bank of England followed the Fed on Thursday when it announced its interest rate decision, after lowering the rate to 0.25% last August. As expected it did not move above that level today. In Luxembourg, finance ministers in the Eurozone will meet in order to discuss the alleviation of Greek debt.

TECHNICAL ANALYSIS

José María Rodríguez, Bolsamanía technical analyst, said that “in Wednesday’s session we ccommented that after the close at the low of the day and below the lateral range of recent weeks, we would be able to guess the most likely scenario, as a correction towards the key support zone of 10,565 points and we still do not rule out a drop even further than that towards 10,380 points.”

“The market appears to be attempting to correct the significant gains accumulated since the end of February. It’s not long since we saw the Ibex 35 at 9,600, having scaled as high as 11,185 during May. Now you know - action and reaction.”