Ibex closes in red as Brazil-exposed stocks tank

After major losses on Wednesday, the Ibex 35 once again was once again in the red on Thursday, but slightly more moderately. The index was 0.94% lower at 10,684.9 points, hampered by Brazil-exposed stocks. In the South American country the stock exchange tanked after political tension involving its president Michel Temer.

Mapfre was the worst performer after a fall of 4.84% to 3.06 euros. It was followed by Banco Santander which fell 3.69% to 5.73 euros.

Other stocks which were seen affected by goings-on in Brazil were Telefonica and DIA. The telecoms firm fell 1.33% to 9.72 euros, while DIA fell 0.78% to 5.34 euros.

Political tension in Brazil started after newspaper “O Globo” reported the existence of a recording in which Temer can be heard authorizing the purchase of silence from corrupt politician Eduardo Cunha, appearing to obstruct the course of justice.

Other companies saw significant losses on Thursday, including Acerinox (-2.38%); Bankia (-2.37%) and Técnicas Reunidas (-2.27%).

A special mention also goes to Banco Popular after a board meeting which is thought to analyse offers from prospective buyers. It fell 2.10% to 0.65 euros, despite quoting gains at one stage of the day.

On the gains side, Grifols registered the best performance after finishing 0.79% higher at 24.9 euros, followed by Cellnex Telecom with a rise of 0.77%. Melia hotels regained 0.69%. Aena also rose by 0.24%. The Fitch Ratings agency improved its credit rating from BBB+ to A.

OTHER MARKETS

Another red session for the Old Continent. The FTSE 100 fell0.89%, the CAC 40 by 0.53% and the DAX 30 dropped 0.33%. The FTSe MiB in Italy was slightly higher at the close.

Wall Street registered gains of around 0.4%, after closing Wednesday with its worst day since September 2016. Donald Trump’s policies continue to worry investors.

The US President is currently unable to control a growing list of scandals related to the obstruction of justice and his alleged links with the Kremlin. Trump has already said that he is the worst treated president in US history, and it is affecting his work and policy objectives.

Brazil takes the headlines, with Bovespa falling 10%, and the Sao Paulo stock exchange being suspended for 20 minutes. In foreign currency, the Brazilian real fell 7% against the euro and is now at 0.26 euros.

The common currency fell 0.25% against the dollar after hitting six-month highs on Wednesday. At the hour of European closing, it was worth $1.13. In commodities, Brent crude rose 0.6% and is now above $52.

TECHNICAL ANALYSIS

Despite Thursday’s losses, far from the lows of the day, “what’s certain is that we can’t say it has left a bad taste in the mouth. The reason is that we are approaching the support zone which we see at 10,530 points,” said José María Rodríguez at Bolsamanía.

“The two major Spanish banks show the movement best today,” Rodriguez added, saying that both entities have filled their gaps respectively at 7.09 euros and 5.6 euros.