BBVA, Telefonica and Santander bring the Ibex close to 10,600 points

Stock markets began August on Tuesday with a good start thanks to a strong company results season, which will see the last big results from the US and Europe this week. Investors will focus on the euro/dollar rate, which shot up to highs not seen since January 2015 following a bounce in inflation in July. The Ibex was 0.8% higher and closed at 10,586.70 points, after it rose 0.5% in July and 13% in the year-to-date.

Big stocks such as BBVA (+1.49%) Repsol (+1.48%), Iberdrola (+1.4%), Telefónica(+1.05%), Santander (+0.87%) and Inditex (+0.86%) performed well on Tuesday, while other stocks which were higher on the day included IAG (+3.65%), Red Eléctrica (+1.99%) and Colonial (+1.52%).

Indra had a bad day (-1.91%), as did Siemens Gamesa (-6.57%). Its bleeding continued as it has now dropped more than 25% in the market since it reported its results. Investment banks have lowered its forecasts, with JPMorgan cutting its target price by 39% to 13 euros per share.

Other European markets began August strongly. The DAX 30 rose 1.1% and the CAC 40 by 0.65%, while the FTSE 100 was 0.7% higher. Oil company BP reported its quarterly results, with a profit of £684m.

At the economic level, manufacturers PMI was published on Tuesday at 54 points for July, continuing to show growth. However, the expansion was reduced from 54.7 points in June and was slightly lower than projections from Reuters of 54.3.

In commodities, oil has advanced 17% from annual lows in June. Brent saw strong falls of 2.85 on Tuersday to $51.20. In the secondary debt market, Spanish 10-year bond yileds show a profitability of 1.43%, far from the 1.7% at the beginning of June.

Lastly, Wall Street saw Dow Jones hit a new high of close to 22,000 points. Apple will report its results after the close on Tuesday, which is likely to affect Wednesday’s session.

TECHNICAL ANALYSIS

“Regardless of the gains made on Tuesday we can say that the Ibex 35 finds itself in the same situation as the past four or five months. The heavy and slow movement, although on occasion erratic and boring, forms part of the typical consolidation,” said Bolsamanía technical analyst José María Rodríguez.

“The thing is that we have already said many times that in recent weeks and months, the Ibex is consolidating laterally, consuming more time than depth. It’s not necessarily bad, the opposite in fact. After all the narrow movement following the ‘overpurchasing’ from the end of 2016 to 11,185, the short term resistance we find at 10,705 points.”