The Ibex has distanced itself from the 10,600 points due to the pressure from Bankia and the electric companies

The Ibex 35 has closed the first session of the week with falls of 0.38% down to 10,555.6 points, after rising in value a 1.1% last week. The index has fallen pressured by Bankia after its results and by the energy sector, that has left its positions amidst the information that talks of the possible cuts of the government and its regulated activity.

This Monday Bankia has published its accounts. Its net earnings have gone up a 1.4% in 2017 up to 816 million euros, but its interest margin is at 1.9 billion euros which entails a fall of 9.6%. Their shares have gone down a 4.31% in the Ibex after their delegate advisor, José Sevilla, has said there was investor appetite to buy the States participation until the end of 2019.

Aside from Bankia the main faller of the day has been the energy sector, due to the government planned cuts over the regulated assets of the gas and electric sector. Endesa (-3.23%), Enagás (-3.07%), Gas Natural (-1.68%), Red Eléctrica (-1.56%) and Iberdrola (-1.08%) have led the Ibex sales. In green, very few numbers: Grifols (+0.96%), ArcelorMittal (+0.62%) and Inditex (+0.59%) have been the most profitable.

RESULTS AND CATALUÑA

On Wednesday the Santander figures will be published and on Thursday, BBVA, on Friday Sabadell and CaixaBank will publish their accounts. For now, the falling reaction for Bankia has been the opposite of Bankinters last week, whose stocks shot upwards after the publishing of their accounts and this pushed the rest of the banks up. We will have to see what happens the rest of the week with other financial entities and if politics doesn’t leave the current business affairs out of the spotlight.

And the thing is that Cataluña is the new main character and will be on Tuesday, the day in which the Catalan parliament will get together and invested Carles Puigdemont or not. At the end of the week the Constitutional Court has denied any type of telematic investiture with or without the presence of Puigdemont in the parliament, with which the Catalan president is managing a difficult situation because if he returns to Spain there is still an arrest warrant on him. The national political uncertainty is very present again and it can affect the Ibex in the next few days.

FEDERAL RESERVE MEETING

This week there will also be rates meeting of the Federal Reserve in the US, the last one with Janet Yellen leading it. The first woman to lead the US central bank will pass the role on to Jerome Powell in February who is expected to respect the marked objective of the Fed for this year in increasing the rates by three.

The meeting of the Fed comes after the meeting of the ECB last week and in the middle of a particular war between currencies that has started after the statements of Donald Trump, Steve Mnuchin, Treasury secretary in the US and Mario Draghi, president of the ECB about the dollar and the euro. The euro/dollar is at 1.2346 dollars (-0.65%) after going over $1.25 last week.

As for the agenda this Monday, in Spain the retail sales have reached a 1.2% in 2017 and they round up 4 years on the rise. In US we have known the underlying index of the prices of the cost of personal consumers (underlying PCE), one of the Fed’s favourite measures to calibrate inflation has gone up a 0.2% in December to close 2017 with a 1.5%. A figure that is in line with what was expected. Wall Street falls a 0.5% this Monday after its last records.

TECHNICAL ANALYSIS

“We start the week distancing ourselves from the control zone of the 10,600points. Although as we said last week, the key, what really matters is what happens at the close on Friday to see the end of the week”, explains José María Rodríguez, the technical analyst in Bolsamanía.

“And it’s only over the 10,600 points and preferably with some extra space that we would have the long awaited double bottom which we have made reference to many times and in so many occasions. On a sectoral level and despite the falls of Bankia this Monday, the financial sector is strong in general terms here and in Europe”, he adds.

“Nevertheless, the utilities sector and the energy sector have been the clear losers of the day in case there are more cuts by the government on the regulatory front. In currencies, the euro/dollar is taking a break and we don’t scratch out the possibility of it looking for a support, before the resistance, that it presented in the previous highs of 2017, 1.2093-1.21”, concludes Rodríguez.