The Ibex fiesta continues with a weekly gain of 3.9%, shooting up 19% in 2017

The Ibex 35 continues to impress and closed with gains of 1.11% on Friday, which pushes it to 11,135.40 points to hit new annual highs, supported by more good performances from the banks.

The 11,000 level arrived at a time when most experts are betting on European stocks. The index has gained more than 3% this week. The eurozone is growing, its companies as well, and the political landscape appears to be clearing. With everything, experts believe that it is a good time to buy European stocks, as they have been recommending for months.

A bank took most of the headlines on Friday. Along with IAG and Amadeus, who also reported results, Popular is without doubt the big winner of the day, after posting losses of 137 million euros. Analysts had expected losses of 28 million euros. Popular explained that the result was a consequence of forecasts of costs, 69.9% more than in the first quarter of 2016. It was the best performing stock on Friday, gaining 8.85% to 0.75 euros.

IAG was the next best performer with a rise of 5.69%, after its results were also well received by the market. Amadeus also reported, to gains of 0.75%. On the losses side, shares in Ferrovial fell 2% after its results from yesterday. Mediaset (-0.6%) and Grifols (-0.59%) completed the podium of losers.

A special mention must go towards the banking sector. Santander (+2.09%) and BBVA (+1.75%) continue to demonstrate their strength. Other impressive sessions were had by Repsol, Iberdrola and Telefonica, but in a more moderate form.

The week ended with the results from Popular, but the main climax of the week will come on Sunday, when the second and final round of elections in France will take place. Emmanuel Macron is widely expected to come out on top against Marine Le Pen. It’s likely that stocks will react positively to that eventuality. Further elections take place in the UK on 8 June.

With regard to data released on Friday, unemployment figures were released in the US for the month of April, beating forecasts and reinforcing the strategy of the Federal Reserve of raising rates two more times before the end of the year. The report came after Donald Trump achieved its first major legislative victory after the House of Representatives voted to replace Obamacare health reforms, which will now head to the Senate.

TECHNICAL ANALYSIS

“The second consecutive week of significant gains for the Ibex 35, which confirms the trend of heading towards the psychological level of 11,000 points. Surpassing this level we can say that the index does not show real resistance levels until the origin of the last corrective movement, at 11,885 points. This shows the boost of the last two weeks (more than 7%) that leaves our primary support far from current levels, at 10,377 points,” said José María Rodriguez, Bolsamanía technical analyst.

“Evidently, we are going to see corrections but the million dollar questions are when and to what level. Technically we can’t see much sign of weakness, but quite the opposite. It also appears as if Telefonica could join the impressive form of the banks at any time. The telecoms firm has been moving laterally for weeks, and in theory should head upwards with a resistance price of 11.23 euros.”

Gráfico del Ibex en velas semanales