The Ibex rebounds 1.9% but closes March with a historical collapse of 22%

The Ibex 35 has risen 1.88%, to 6,785.40 points, on the last day of a month of March that will go down in history and in which it has accumulated a collapse of 22%. And that despite the fact that the Spanish index has managed to rebound 15% from the annual lows (and since 2002) of 5,814 points, marked on the 16th.

March 2020 will go down in history as the month in which a virus originated in China and called Covid-19 paralyzed Spain and the entire world after causing a pandemic that has spread throughout the planet.

The health crisis has paralyzed the world's most advanced economies and has confined billions of people to their homes, which in turn has caused a sudden recession and the instantaneous collapse of world stock markets.

Spain is being one of the most affected countries in Europe along with Italy. The country has been in alarm for two weeks and has already counted 94,417 infected, 8,189 deceased and 19,259 cured, according to the latest published data. And although little by little it seems that the confinement is managing to contain the virus, the situation is still dramatic, typical of a health emergency as has not been remembered in our country since the 'Spanish flu' of 1918.

The Spanish government, which is being criticized in recent days both for its management of the pandemic and for its economic measures, has launched this Tuesday a new package of measures to help the self-employed and the most disadvantaged, after decreeing on Sunday the temporary cessation of non-essential economic activities until April 9.

The only hope of the Executive led by Pedro Sánchez is that the Covid-19 will be contained in the coming weeks and that the drastic measures to stop the pandemic can be progressively withdrawn. That is the great hope of all Spaniards, who still face two more weeks of confinement with great uncertainty and in a totally exceptional situation, which cannot be prolonged for much longer.

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The non-manufacturing PMI report was also released, standing at 52.3 against the estimate of 42.1 and the previous benchmark of 29.6. "The sharp turnaround in trading activity gives hope to western economies that are currently blocked," says David Madden, an analyst at CMC Markets in London.

In the euro zone, inflation slowed sharply in March, according to a first estimate known on Tuesday. The oil price war between Russia and Saudi Arabia lowered energy prices and the coronavirus pandemic halted economic activity across the bloc. The CPI rose 0.7% compared to the 0.8% forecast and 1.2% previously.

In Spain, GDP grew 2% in 2019, its lowest rate in five years.

On the other hand, West Texas has rebounded to around $ 22 a barrel after sinking below $ 20 last session to 18-year lows. "The market is flooded with oil that no one needs right now. Joint action by oil-producing countries to reduce production could encourage some recovery in prices. But any intervention on the supply side should be considerable to match the historical decline in demand, with an estimated cut of 5 million barrels in daily oil demand only due to planes that have been grounded worldwide, "explains Ipek Ozkardeskaya, analyst at Swissquote Bank.

The White House, on the other hand, is discussing additional $ 600 billion in fiscal aid measures, in addition to the historic $ 2 trillion rescue package signed a couple of days ago.

"The sheer amount of money being sprayed into economies to stem the slowdown in growth will have long-term implications for debt levels, not just in the US, but around the world," warns Ozkardeskaya.

IBEX 35 ANALYSIS

"It is true that I expected a little more verticality in the rebound, but we must not forget that at the closing price last Thursday it showed a balance of 21% from the annual lows of 8,814 points. But despite the fact that it is taking its time we have no sign today that invites us to think that he may have come to an end.

At least not to the extent that we continue to have very short-term rising lows and highs. Therefore, there is no reason not to continue thinking of 7,436 points as the next objective (last downward gap) and above, the 8,000 points (adjustment of 50% of all the previous fall).