Ibex falls as Sabadell and Mapfre tank

The Ibex 35 swung to a loss in Thursday’s session. The market fell 0.39% to 10,328 points as it was dragged downward by Banco Sabadell, Mapfre and Iberdrola.

The Catalan bank saw a gain of almost 7% in the previous session, and was the worst performer on Thursday, falling 3%. It was followed by Mapfre which was also down 3% after seeing its valuation cut by JPMorgan, and Media Set (-2.38%).

In the higher part of the table, few stocks finished in the black. Among those were the best performer Acerinox which was up 2.08%, while Indra (+1.44%) and Grifols (+1.32%) also performed well.

JPMorgan reiterated their recommendation on Banco Santander, and elevated its 12-month target price to 7 euros per share. The shares were up 0.5% to 5.89 euros.

In the financial sector, BBVA told the CNMV today that it had negotiated the sale of its property operatiosn to US fund Cerberus. The bank assured that it ‘was in conversations with Cerberus Capital, an entity which is interested in the real estate of the bank in Spain’. Its shares were down 0.77% to 7.44 euros.

In company news, Abengoa announced on Monday that it made 4.9bn euros in the first quarter of 2017, against the 3.68bn it lost in the same quarter last year, thanks to the restructuring carried out by the group. Shares in the company were mostly flat.

However, the attention for most investors continues to be centre on Sunday’s independence referendum, and above all what will come after the event. Experts are betting on a solution between the two sides which will lead to an agreement sooner rather than later. However, the fear is that is that the situation falls out of control.

In fact, the Bank of Spain pointed out today the main risk in Spain were the political tensions in Catalonia, as the current situation might ‘affect the confidence of agents and their decisions on spending and finance.” Economy minister Luis de Guindos said that ‘the markets don’t believe in independence because it would be a disaster’.

Donald Trump announced on Wednesday his plans for major tax reform in the US, proposing cuts for the majority of citizens. However, the plan was criticised for favouring the rich and putting into doubt the ability to bridge the deficit. US 10-year bond yields rose after the latest news and the dollar also increased in value. The euro/dolalr is now at $1.1765.

In the US, the economy grew by 3.1% in the second quarter, according to latest GDP estimates. This represents five points above the first estimates.