Ibex 35 hits annual highs and now just below 10,400 points

Banco Popular rose 3.24% and was the best performer in the Ibex, after reports published by El Confidencial about “advanced conversations” for selling shares or capital to Greek group Libra. Mapfre (+2.63%) and Caixabank (+2.25%) completed the top performers.

Gas Natural gained 1.8% after the sale of Naturgas from the EDP for 2.6 billion euros. The PSI 20 in Portugal was the best performing index in Europe with gains of 2.7%, thanks to the strong advance of EDP and its affiliates.

Away from the Ibex, Abengoa was confirmed to have received a capital injection, with its shares falling after several sessions of strong gains.

Liberbank (+3.92%) also had an impressive day, after Economy Minister Luis de Guindos forecast consolidation movements in the banking sector.

All this comes in a session when three important investment banks outline their positive forecasts about European equities. JPMorgan, Morgan Stanley and Julius Baer demonstrated confidence in Euro markets, based on company results in all cases.

"The financial sector is still our preferred market area, because we see room for better valuations and an increase in profitability," Morgan Stanley said. Banco Santander rose 1.68%, followed by Bankia (+1.39%), Sabadell (+1.35%), Bankinter (+1.21%) and BBVA (+1.04%).

Political tension remains the focus of many investors, especially on the other side of the Atlantic. Donald Trump’s son-in-law and key adviser Jared Kushner is being investigated for links to Russia. The criticism of Trump comes as many suspect Russian involvement during the 2016 US election. Investors remain alert to Trump’s problems in getting his campaign policies through.

In Europe, meanwhile, Theresa May remains firm on the prospect of another independence referendum in Scotland, ahead of her expected signature of Article 50 to start the Brexit process on Wednesday.

In foreign currency markets, the dollar regained ground after falling last week. The euro is now worth 1.0852 US dollars.

At a technical level, César Nuez, Bolsamanía technical analyst, points out that the Ibex 35 has surpassed annual highs which were at 10,334 points, and “it appears to want to continue with its upward movement towards the 10,500 points level. The first level of support is at 10,191 points if that level is reached, while it is currently situated at 10,092 points.”