Ibex sees end to recent gains after falling 1.3%

After four positive sessions in a row for the Ibex 35, the index fell 1.29% on Wednesday to below 10,600 points (10,596). The market closed above 10,700 on Tuesday, with investors betting on a correction off the back of increased tension between the US and North Korea.

Bankia, Siemens Gamesa and BBVA led the losses in the Ibex, with falls of around 2.5%. On the other side of things, only Acerinox (0.71%), Colonial (0.16%) and Cellnex (0.05%) finished higher. Banco Santander was 2.07% lower following the sale of 51% of the drag of Popular to Blackstone.

Bankinter analysts raised the valuation of Banco Sabadell shares to 2.10 euros from 1.90 euros. It reiterated its neutral stance on the bank. Sabadell fell 0.7% to 1.89 euros.

The rest of Europe was covered by red also. The CAC 40 fell 1.53%, the DAX 30 was 1.17% lower, while the FTSe MiB in Milan was down 0.94%. The FTSE 100 in London fell 0.65%. Wall Street also opened lower, with the Nasdaq shedding 0.5%.

The euro saw a correction this week from a 31-month high of above $1.18 last week. However, recent employment data in the US was above expected and pushed the greenback up. On Wednesday the euro/dollar was slightly lower at $1.1740.

GEOPOLITICAL RISKS

Investors are experiencing a calm August after the deluge of results at the end of July. However, geopolitical tension is ensuring that does not continue for long, after North Korea threatened a strike on the US territory of Guam, just a day after Donald Trump promised to meet the isolated regime with ‘fire and fury’.

In macro terms, productivity and salary costs data for the US was released on Wednesday, with labour costs up 0.6%. Productivity beat expectations for the first time in months, rising 0.9%. Good news for the Federal Reserve, which had been worried about the weakness of this indicator.

Weekly crude inventories were also published, reduced by 6.4m barrels, well above the expected fall of 2.72m barrels. West Texas oil is mostly flat, while Brent gained 0.17% to $52.23.

In Asia, the main markets were seen affected by the upscale in tension between North Korea and the US. the Nikkei fell 1.4%, the Shanghai composite fell 0.2%, the Hang Seng in Hong Kong was 0.6% lower while the Korean Kospi was down 0.9%.