Ibex falls below 10,600 as Santander suffers

Santander fell 0.78% after announcing a major capital investment and the Ibex 35 fell 0.35% to 10,566.70 points. The bank, which fell over 2% in the opening hours of trading, eventually finished with more moderate losses. The bank said its dividend for 2017 will be paid in August, bringing forward its results for June with a profit improvement of 24% to 3.6bn euros.

In the Ibex, the best performers were Tecnicas Reunidas (+1.7%, which announced the dividend payment of 0.72 euros for 10 July, and Bankia (1.5%) which continues its rally after the BMN agreement. Goldman Sachs affirmed today that its forecasts were improved and earnings per share predictions were also higher.

On the other hand, the worst performers were Acciona (-1.6%) and DIA (-1.3%). In the general stock exchange, Prisa and Duro Felguera shot up close to 10%. The worst performer was Saeta Yield with losses close to 4%.

Returning to Santander, the fact that the injection was made with a discount should in theory penalise it further. However, the news about dividends are always received positively. The bank is strong from a technical point of view. It is respecting the support of 5.60 euros. Regarding its results, Santander said the information published on Monday is preliminary and is still under deliberation before it reports on 28 July.

Quarterly earnings will come for the first time since its acquisition of Popular on 7 June. Its impact, however, is unclear for the moment. “The net profit attributed to Santander to 30 June after the integration of Popular will experience a variation of little significance to the estimated 3.6bn euros it would lose if it had not taken place,” regulatory body CNMV said.

Santander is, as a result, the main news ina day marked by market closures on Wall Street for Independence Day. Yesterday saw a partial session which ended with the Nasdaq losing 0.49%.

In other markets, Brent crude rose 0.4% and grazes $50 per barrel, while West Texas saw similar gains at $47.30. The euro fell 0.16% to $1.1350, while an ounce of gold was 0.3% higher at 0.3%. Prime risk in Spain fell 1.6% to 104 points.

TECHNICAL ANALYSIS

“Despite ending the day practically flat, what’s really interesting is that the Ibex 35 doesn’t appear to want to break the support of 10,377. In fact, it’s not necessary to fill in that gap in its entirety. The only doubt we have is if the rest of the European indices will see a new downward trend and the possibility of filling the gap,” said Bolsamanía technical analyst José María Rodríguez.

“What of the Ibex 35? It’s likely that the key which shows us the end of the losses is BBVA. Above 7.6 euros would give us a major signal of strength in the index and we know that the Basque bank functions well at the head of the Ibex. The perforation of the support at 7.09 euros would pour cold water on the run,” he added.