Ibex ends the week nervous on tensions in Catalonia

The Ibex 35 remains cautious and fearful. Whatever happens next week in Catalonia, the markets have been totally spooked. On Friday, it rose 0.08% to 10,305 points and closed the week with losses of 0.1%. The fact that North Korea has once again threatened to launch a hydrogen bomb hasn’t helped, while Theresa May made an important Brexit speech in Florence.

The best performer on the day was Abertis (+2%), which celebrated the arrival of British fund TCI. Investor Christopher Hohn made great profits with Aena, and has purchased 1% of Abertis with an offer from Atlantia. Abertis shares closed at 17.37 euros, well above the 16.50 offered by the Italian group.

Other risers in the Ibex included Melia Hotels (+1.20%) and Mapfre (+0.85%). Among the blue chips, Santander was up 0.81%, Repsol by 0.49% and BBVA by 0.04%. Inditex fell 0.28%, Telefonica by 0.3% and Iberdrola 0.67%. The worst performers were ArcelorMittal (-1.77%), Tecnicas Reunidas (-1.66%) and Siemens Gamesa (-1.60%).

The North Korean regime has threatened to launch a hydrogen bomb in the Pacific in response to a speech from Donald Trump at the United Nations in which he said he would ‘totally destroy’ the country if it attacked one of its allies. In the middle of this, the Central Bank of China ordered financial entities in the country to stop doing business with North Korea. The crisis remains very real.

What’s more, the tension between Catalonia and the state continues. Next week will see the referendum on independence which was declared illegal by Mariano Rajoy and the judicial system and it is still affecting the Ibex. Analysts expect the tension to grow further next week. For the moment, prime risk in Spain remains calm at levels of 118 points, and the 10-year Spanish bond yields remain at 1.60%.

UK PM Theresa May made an important Brexit speech in Florence, where she set out a two-year transition period where the country adopts EU rules. May requested special economic status, and shortly afterwards the pound fell 0.7% to $1.3507.

In Germany, Angela Merkel will face elections this weekend in which she is expected to win, with markets pricing in the result on Monday.

Regarding the data of the day, manufacturers PMIs came out in Europe better than expected. In the eurozone, it was at four-month highs. OPEC members also met with those from the non-OPEC group. Mario Draghi spoke about youth unemployment in Ireland as well as other countries in the continent.

Regards technical analysis, little has changed. The Ibex remains inside a narrow range of prices understood be between 10,290 and 10,400. Bolsamanía analyst José María Rodríguez commented that the Ibex is in ‘no man’s land’.