The Ibex falls over 2% and sets annual lows close to 9,500 points

New session of important losses for the Ibex 35 that falls a 2.23% down to a new annual low at 9,521 points. The falls are general to all European stocks since the investors have left the market until the Italian elections’ result is known and until the SPD votes for the coalition in Germany. As if this weren’t enough Wall Street also falls in fear of the tariffs from the Trump administration on aluminum and steel that may trigger a trade war on a global scale.

“It’s probable that the measure provokes a response from the EU, Canada and China, which supposes a risk of global commercial war that could potentially derail the global economic improvement”, warn the analysts at Danske Bank in their daily report.

Experts at Berenberg consider the measure “inappropriate” and “ill-timed”. In their opinion, in the current scenario of high trust of consumers and US growth on a global level, “the tariffs proposed represent a wrong approximation to trade and a poorly chosen moment”. They conclude saying that “the Trump administration will be wise if it reconsiders or withdraws the proposal”.

THE COMPANIES OF THE IBEX

In the current business scenario the lowest fallers in the Ibex are Siemens Gamesa (-4.4%) and ArcelorMittal (-4%). The metal group could be one to be affected by the US tariffs according to the market.

Among the big values, strong falls for Repsol (-3.2%) and CaixaBank (-3.1%), followed by Amadeus (-2.6%), Santander (-2.3%), Inditex (-2.2%), BBVA (-1.9%), Iberdrola (-1.7%), Telefónica(-1.6%), Gas Natural (-1.5%) and Endesa (-1.2%).

In the currency market, the euro rises in value a 0.34% up to 1.2310 dollars. The green bills that had a week of rises, fed by the optimism of Jerome Powell, has been affected by Trump’s measures.

POWELL’S MESSAGE

On the other hand, Jerome Powell’s speech on Thursday in front of the US Senate didn’t help the stocks fare any better. The president of the Fed repeated the same idea that he had proposed on Tuesday to Congress and highlighted the idea of strength in economic improvement, which worries the investors in the light of a hardening of monetary policy quicker than expected.

Powell said that from his point of view, the bonds falling (from the start of the year) and the increase of their profitability “is due to an economic growth in the US and globally” and that “inflation is estimated to move towards the objective of 2%”.

As for macro data in Spain, unemployment was reduced by 6,280 people in February. Mark Carney, governor of the Bank of England, has given a speech on Friday and have asked for more regulation for currencies.

TECHNICAL ANALYSIS OF THE IBEX

“As we said a few sessions ago the rebound to 9,900 points fit perfectly in a pull back to what was previously a support zone, now resistance. From this moment and after checking that we can’t go to 9,900, the door is open to the possibility of going back to annual lows: the 9,580-9,600 points. And this support has also been taken down”, explains José María Rodríguez, analyst of Bolsamanía.

“Therefore, rebounds aside, we give continuity once again to the impeccable succession of highs and lows, which is no way of rising. Come to this point we don’t find any support to the 9,250 points zone”, adds the expert.

“If we see in this moment the value with most capitalization in our market, Santander, it’s listing in its support zone, in the base of the lateral- rising channel of the last months. It’s important that the support of 5.4 euros doesn’t break through if we want to retain hope that sooner rather than later a strong rebound will come our way”, concludes Rodríguez.