Ibex closes close to 11,000 in a historic week for Santander

The Ibex 35 appeared steady and ended 0.23% higher on Friday at 10,978.30 points. In a week full of events, such as Santander’s purchase of Banco Popular, Friday’s big news was the fact that Theresa May lost the Tory majority in the UK parliament, but will form a government with the DUP from Northern Ireland.

Experts point out that the fact she needs partners in government will make Brexit discussions more difficult. There are some who believe that the possibility of a soft Brexit is an unrealistic prospect, with the EU hoping to dissuade others from going down the same road.

One of the main consequences from May’s unexpected loss of majority was the drop of the pound of 1.7% against the US dollar, to $1.2736. This provoked a bounce in the FTSE 100 index, owing to the fact that it is made up of big exporters. Other European markets also saw gains, with 0.8% for the DAX 30 as well as the CAC 40.

Away from the UK elections, Popular’s bailout continues to grab the headlines. Santander shot up on Thursday, and rose 1.16% on Friday to 6.12 euros, but the threat of weakness in Spanish banks remains here to stay. Liberbank, one of the most questioned banks of recent times, falling 18% on Thursday and a further 17% today.

Other general stock exchange companies have been feeling the effect, including Prisa (-8%), Service Point (-7%) o Abengoa (-6%). Pescanova, which had plunged almost 100% in the two days following its return to the market, shot up 90% on Friday. OHL was also able to stop its tanking, although it gained only 3%.

In the Ibex, Cellnex was the best performer with gains of 2.07%, followed by Caixabank (+1.75%) and Mapfre (+1.45%). IAG was the worst performer with losses of 2.67%, followed by Mediaset (-1.39%) and Indra (-1.32%).

Friday saw more analysis of the words of the European Central Bank and Mario Draghi. The body had given a small indication - but an indication nonetheless - towards the normalisation of monetary policy. He ruled out the possibility of reducing the rates below 0%.

TECHNICAL ANALYSIS

“Despite the light gains of the Ibex 35 this week, I’m still convinced that the movement of Santander is key since the purchase of Banco Popular. Technically it has performed excellently. On Wednesday it filled the gap it set at the end of April at 5.618 euros, and from there it was renewed with new energy,” said Bolsamanía technical analyst José María Rodríguez.

“So much so that in Thursday’s session it ended at highs of the lower trend from 18 May at 5.958 euros. As a result it can be said that it provides the conditions for the Cantabrian bank to make its way towards 6.35 euros. It’s only lacking a push from the second biggest bank, BBVA.”