Ibex 35 closes with losses, affected by the banking sector

Banks were once again the protagonist as the Ibex 35 closed 0.39% lower at 10,793.4 points. A day which was marked by the victory for Pedro Sanchez in the primary elections for political party PSOE, an article which the market has taken on the chin. Outside of politics, the euro had significant gains.

Returning to the Ibex, the five worst performers were banks. The wooden spoon of the day went to Banco Popular, which fell 3.2% to 0.69 euros. The entity’s sale still weighs on investors’ minds.

Emilio Saracho’s bank was followed by one of the index’s heavyweights. Banco Santander fell 2.14% to 5.7 euros. It has been a poor session also for BBVA, which fell 1.16% to 7.3 euros. Bankinter, Caixabank and Bankia falling 2.08%, 1.52% and 1.34%. The bank which fell the least was Banco Sabadell by 0.33% to 1.8 euros. Telefonica was also in the red by 0.08% at 9.9 euros.

Merlin was the best performer on the day, rising 1.49% to 11.2 euros. It was followed by Inditex which gained 1.13% to 36.34 euros. This advance ensured the Ibex’s losses were not even further. Cellnex Telecom was the third best performer, gaining 1.07%. Indra was one of the other better performers, gaining 0.63%.

OTHER MARKETS

The euro was one of the main talking points of the session. The common currency took charge once again in charge against the dollar. At the close of European markets, the euro rose 0.22% in exchange for the US currency at $1.12, its highest level in six months.

In the rest of Europe, there was a mixed bag. The FTSE 100 rose 0.35% and the CAC 40 was slightly higher by 0.03%. On the other hand, the DAX 30 was similar to the Ibex, with a 0.12% loss. Wall Street was registering a gain of 0.4% at the halfway point. The New York stock exchange is alert to its president Donald Trump’s visit to Saudi Arabia. Oil prices are also grabbing headlines after Brent crude rose 0.88% to $54, while West Texas was up 1.03% to $51.

Crude will continue to be important all week, as the OPEC meeting takes place on Thursday in which it is expected to announce another cut in oil production. However, the price of oil rose 11% in May and the market may have already priced this in.

In the political arena, the PSOE was occupying the headlines on Monday as Pedro Sanchez won the primary elections for the party. There have been worries that political stability in the country could be threatened by the victory. However, the effect of local politics appears to have little effect on the Ibex.

TECHNICAL ANALYSIS

José María Rodríguez, technical analyst at Bolsamanía, pointed out the session had moved within quite a narrow range of prices, at one stage hitting 0.68% lower price. “At that moment, we passed the support of the Ibex 35 at last week’s lows (10,564 points), and below the most relevant upward gap.”

He added that “only filling the upward gaps of 24 April’s session will we begin to distrust the strength of our market in the short term.”