Ibex moves away from 10,700 despite big push from banks

The Ibex 35 was not capable of making it to 10,700 points on Tuesday and was pushed further away from that level. The index fell 0.46% to 10,647 points, despite a good day for the banks. In fact, the banking sector was 1.5% higher. The market saw gains earlier in the day before being pegged back as it headed towards the afternoon.

Bankia was the major talking point of the day, and led the board with a gain of 3.53% to 4.17 euros. The bank valued Banco Mare Nostrum at 825 million euros, with board members approving the prospective merger.

Caixabank was the second best performer as it was 3.31% higher at 4.2 euros. ArcelorMittal completed the podium with a rise of 3%.

The rest of the banks also finished higher. Banco Santander rose 0.68% and BBVA 0.88%. Banco Sabadell registered a significant gain of 2.37%, after S&P increased its rating to BBB-. However, Bankinter fell 0.17%.

On the other side there were important losses for energy companies. Red Electrica picked up the wooden spoon with a loss of 3.87% to 19.51 euros. It was followed by Enagas, which fell 2.51% and Iberdrola (-2.47%). Among the heavyweights, Tuesday was not a good day for Telefonica, which fell 1.24%, while Inditex was 0.31%. However, Repsol closed 0.26% higher, pushed on by the fourth consecutive day of rising oil prices.

In the general stock exchange, Abengoa was in focus. Its type A shares gained 38%, although its price remains at 0.04 euros. Pescanova fell 20%.

OTHER MARKETS

The rest of the European markets closed with falls larger than the Ibex 35, apart from the FTSE 100 which fell 0.17%. The DAX 30 fell 0.78% and the CAC 40 by 0.7%.

Investors remained alert to ECB President Mario Draghi, who reiterated his support for stimulus after defending the policy of the body yesterday. The euro rose 1.04% against the dollar to $1.13, although it also hit a high of $1.1305.

Wall Street saw losses in the early part of the session, although the Nasdaq was the most affected after Google’s record fine from the EU saw its parent company Alphabet fall more than 1%.

Oil continues to rise and is now higher for the fourth consecutive day. A barrel of Brent now costs$47 after a 2.27% rise. West Texas rose 2.2% to $44.34.

TECHNICAL ANALYSIS

José María Rodríguez, technical analyst at Bolsamanía, pointed out that “Tuesday’s session was strange.” We have said before about a special dependency in European markets on banking sectors. However the major banks in Europe rose close to 1.5% as stock markets fell.

“What happened? The good behaviour of the banks was offset by the significant losses of the energy and electrical firms. In Spain Red Electrica (-3.87%), Enagás (-2.51%), Iberdrola (-2.47%) and Endesa (-1.95%) all fell,” Rodríguez said.

He added that Telefonica is in a weak position and fears that “it may rupture the significant support which it has at 9.30 euros.”