Ibex falls 0.75% and below 10,200 points after ambiguous response from Puigdemont

The Ibex 35 was once again the worst index in Europe and closed down 0.75% at 10,181 points. The index had to deal with the ambiguous answer from Carles Puigdemont, who was responding to the government request for clarification on whether he had declared independence for Catalonia.

Faced with the situation, the government said Catalonia had three days to either retract or retain the declaration it made last week. If it does not retract, Rajoy’s government will activate Article 155 in order to withdraw the region’s autonomy.

“The Catalan president is in a difficult position, if he backs down then the Catalan government will probably split and we could well see new elections, and if he declares independence then he risks arrest as well as potentially forcing Madrid’s hand in triggering article 155 of the Spanish constitution and imposing direct rule, a step that could well trigger significant unrest,” said analysts at CMC Markets.

Deutsche Bank pointed towards several negative economic views put forward by various organisations in the region. “The current situation in Catalonia could damage the immediate economic activity in the region due to the fall in production associated with the strikes, loss of tourism and product boycott.”

SIEMENS GAMESA

Siemens Gamesa was the worst performer on the day. It tanked 6.4% in the market after issuing a profit warning, before it reports results next month.

Joining it in the lower part of the table was Endesa, which was down 2%, and BBVA (-2%), despite announcing today that it will create an app for creating an exchange between the US and Mexico. Most of the big stocks fell today, including Sabadell which was down 2.7%, while Caixabank was down 2.13%. Telefonica was down 1.79% and Santander by 0.49%.

On the other hand, Tecnicas Reunidas was up 1% to lead the gains as it continues to benefit from positive trade news in China. Also, Abertis was also up (0.6%) after announcing its departure from the market on 25 October as a result of its proposed acquisition of Atlantia.

Lastly, in the general stock exchange, Prisa and OHL were in the news. The former was down 8% after announcing capital injections of 500m euros. OHL shot up 11% after a possible offer for its affiliate to the tune of 2bn euros.

TECHNICAL ANALYSIS

Bolsamanía analyst José María Rodríguez explains that “despite the losses with which we started the week, there is no major changes in the technical aspect of the index. The problem is that it still hasn’t corrected to 10,000 points. The possibility of looking towards the base of the channel is there, but it remains trapped inside the lower movement for the last five months. Looking up, the resistance to beat is at 10,410 points, highs of September.”