Ibex takes another small step in search of 10,700 points

ArcelorMittal was the best performer at the beginning of the week, as the mining group shot up 4.78% in a good day for commodities following a 7% rise in the price of iron ore. After Arcelor, Aena (+1%), Bankinter (+0.99%) and Cellnex (+0.86%) were the next best performers.

At the other end of the table is Tecnicas Reunidas, after the announcement of the adjudication of one of its Oman contracts. It rose 4% on Friday but was 3.61% lower on Monday. Siemens Gamesa returned to selling and fell 2.16%, while DIA was 2.3% lower.

Other European indices also saw slight gains on Monday, after significant upward movements upwards on Friday. The CAC 40 was 0.1% higher. In Frankfurt, the DAX 30 led the losses as it closed 0.38% lower, while the FTSE 100 rose 0.23%.

The deprecation of the euro against the dollar, which fell to close to $1.1750, is around $1.1790 on Monday, pushed on by the Ibex.

Regarding the strength of the euro in recent months, Bankinter experts point out that is owing to two factors. In the first place, the European economy is increasing its growth rate, while “the market expects the ECB to announce a plan to withdraw stimulus in September, with Draghi even hinting so in the recent central banks meeting at Jackson Hole between 24-26 August.”

On the other hand, the experts mention that the “political situation” in the US and the Fed, which reduced the likelihood of a new raise of rates this year. “We think that the euro is likely to take a breath, as it is too strong in relation to the ECB’s inflation of objectives, while the bond market does not see financial conditions like this lasting too long.”

Monday’s session was characterised by the typical reduction in volume associated with the summer months, although according to XTB analyst Joaquin Robles, investors have still not collected their profits. The expert said current market confidence has allowed stocks to consolidate their current levels. In the second week of August, there is little news of importance for companies, following the end of result season.

In the macroeconomic realm, German industrial production fell 1.1% unexpectedly, as the market predicted a bounce of 0.2% in the month of June. It’s the first fall in this indicator this year.

At a technical level, the Ibex is very close to the resistance of 10,700 points. Breaching this level would open the door towards 11,000 points and allow the index to attack new highs in the short term. However the movement is still lateral, and will remain so if it doesn’t push above this level or fall below the support of 10,350-10,400 points.