Ibex surpasses 10,600 as Telefonica soars

The Ibex 35 closed 0.26% higher on Thursday, allowing it to finish above 10,600 points. Telefonica, with a gain of 3.48%, led the index after reporting its quarterly results. On the losses side, Siemens Gamesa tanked 17.33% due to the temporary halting of its Indian business, while investors remain alert to the euro and dollar after Wednesday’s Fed meeting.

Telefonica was the best performer on Thursday. The company increased its profits in the second quarter. It increased 18.4% to 821m euros, accumulating net gains of 1.6bn euros in the first six months. However, the market had expected higher.

Repsol also reported impressive profits in comparison with the same period last year. The oil firm reported a net profit of 1.056bn euros, a 65% increase year-on-year. Its shares rose 0.7% to 14.1 euros.

On the other hand, DIA closed 0.93% lower. The supermarket chain saw a bugger slowdown than analysts had expected. It showed a profit of 38m euros in the second quarter, 22% than last year’s period.

Steelmakers also reported on Thursday. ArcelorMittal rose 1.5% after informing net income to be 2.324bn euros, an improvement of 234% in respect to last year. Acerinox closed 0.88% lower after gaining a net profit of 151m euros.

Red Electrica was slightly lower after reporting net profits of 340.1m euros in Q1, 5.1% better than Q1 2016. After the close it will be the turn of BBVA, Melia Viscofan, Gamesa and Ferrovial.

However, the big loser of the day was Siemens Gamesa, which tanked 17.3% to 14.5 euros per share after the halting of its Indian business. The volume of trading is very high, with a daily average of 1.6m shares showing 10m on Thursday.

However, results season is not the only focus on Thursday, after the Federal Reserve meeting which took place on Wednesday. The central bank led by Janet Yellen reiterated its intention to reduce its balance, but also pointed out that inflation remains low. The euro hit a 30-month high against the dollar at $1.1776, with the common currency currently sitting at $1.1670.

In commodities, oil was higher and Brent now finds itself above $51. The Spanish 10-year bond market shows a profitability of 2.71%. Other European exchanges closed lower. The DAX 30 fell 0.7%, while Wall Street hit new record highs encouraged by company results.

TECHNICAL ANALYSIS

Bolsamanía analyst César Nuez said the Ibex is still in line with the current correction. “The Ibex closed slightly higher which, however, allows it to finish above 10,600 points. For the moment the correction of recent months is maintained and will continue to do so until we see a serious sign of strength. The first resistance we find is at 10,704 points. Until we see a close above this level we continue to see a return to 10,400 points.”