Ibex falls 1.2% this week and is now close to 10,600 support

The Ibex 35 ended Friday with losses of 0.74% to 10,630.80 points, and is now heading dangerously close to the key technical support in the short term of 10,600 points. The Spanish index led the losses in the Euro indices and is at its lowest close for the week, following a 1.2% loss in the last five days.

The poor behaviour of blue chips such as Banco Santander (-1.04%), BBVA (-1.01%), Iberdrola (-0.83%), Inditex (-0.6%), Repsol (-0.44%) and Telefónica (-0.2%) was the mai reason for the decline. However, the biggest losers were Sabadell (-2.18%) Grifols (-2.07%) and Caixabank (-1.97%).

On the other hand, the best performers were Acerinox (+1.22%), Indra (+2.08%) and IAG (+0.75%). In the general stock exchange, there were gains for Montebalito (+8%), Oryzon Genomics (+5%) y Europac (+5%). Among the losses was Duro Felguera (-9%) and Prisa (-7%).

Cellnex Telecom dropped 1.01% after Goldman Sachs cut its rating for the operator to ‘hold’ from ‘buy’, owing to the revaluation of its shares in recent months.

This all comes in the one year anniversary of Brexit, and the biggest loss in the history of the Ibex. The ibex fell 12% and closed at 7,787 points that day. 12 months later, European leaders met in the second day of meetings of the European Council. Terrorism, Brexit and globalisation were on the agenda as Theresa May made an offer of rights to EU citizens following the UK departure.

Oil continues to attract attention. In fact, there seems to be several parallels in the commodity’s price and stock markets. At the moment, Brent is 0.9% higher at $45.63, while West Texas gained 0.8% to $43.10.

In relation to data released on Friday, services and manufacturing PMIs for June in Europe was a talking point. In the eurozone, manufacturers PMI was above what was expected (57.3 with a forecast of 56.8) while services fell to 54.7 (56.2 expected). These benchmarks end a week of poor results in data. Next Friday will see investors approaching two important dates - Abengoa’s shareholders meeting and the debut of Unicaja, which arrives in a complicated time after the sale of Banco Popular.

TECHNICAL ANALYSIS

“Once again, and for the second time this week, we have tested the support level of 10,600 points. What worries me is what usually happens in these cases is that if you keep pushing your luck, your luck eventually runs out, It’s true that the support has not been broken, but it is getting very close,” said José María Rodríguez, analyst at 'Bolsamanía'.

“Either we could bounce from the beginning of the week, or we could fall towards the lower support of 10,380 points from 24 April. But until we break the support there is always hope.”

Gráfico diario del Ibex 35