Sabadell leads the Ibex rebound, in its biggest rise since April

The Ibex 35 rebounded on Thursday after its worst session since Brexit the day before. The index closed up 2.51%, its biggest rise since April, and recovered 10,200 points, ina volatile session. Banco Sabadell was the big player after shooting up 6.1% after it became known that its board will meet this evening to consider moving its headquarters. Caixabank was up 4.9%, while electric firms Iberdrola (+3.12%) and Endesa (+2.99%) also led the gains.

After tanking 2.85% hampered by the banking sector and the ongoing crisis in Catalonia, the Ibex opened with 9,964 and finished up recovering 10,200 points. The change of headquarters, which is being discussed now at sabadell, has motivated the run. The bank wants to ‘guarantee the security from regulation of the European Central Bank”, according to sources from Europa Press.

As well as Sabadell, Eurona has also decided to move its HQ from Barcelona to Madrid, taking it 5.26% higher.

Caixabank said yesterday it would do ‘everything necessary to protect the security of its deposits’.

Returning to the Ibex, the banks regained ground and finished in the black. Santander was up 2.93%, followed by BBVA (+2.77%) and Bankia (+2.41%). Other blue chips were also higher, such as Telefonica (+2.94%) and Inditex (+1.91%).

On the fallers side, only two stocks were in the red, with IAG down 0.69% and Melia Hotels down 0.54%.

Carles Puigdemont spoke on Wednesday in response to King Felipe VI. As the situation has shown very little is predictable, and few would be surprised if the leader of the Generalitat was to follow through with his promise of declaring an independent republic this week.

The problem now is what is about to come, and the market continues to be worried about a banking crisis if the situation continues. A withdrawal of deposits from Catalan banks appears to be a real possibility, doing a lot of damage to the financial system. Since last Friday, the banking sector has lost 10.825bn in value.

Away from Spanish politics, Janet Yellen spoke on Wednesday to reaffirm that the Federal Reserve is attempting to reduce regulation of local banks. Theresa May was also in the news after a speech at the Conservative conference in which she was repeatedly interrupted by coughing.

The ECB reiterated on Wednesday that it will announce a plan to gradually reduce its liquidity, although there is no rush.

On Thursday, the calendar shows a report of the monetary policy committee at the ECB and remarks from Coeuré. In the US, weekly job figures and factory orders will be released.

TECHNICAL ANALYSIS

Bolsamanía analyst José María Rodríguez said: “what’s really interesting about today is not the recovery of Thursday, cancelling out the strong losses of Wednesday, but also the close of the graph we have tomorrow.”

“Experience shows us that on many occasions the market works as such: in moments of fear it goes from one day to the other. We were threatened by a clear pessimism and ended the day with strong gains, totally unexpected.”