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Tuesday, July 5, 2022

The Ibex 35 closes the session in the green (+0.84%) but loses almost 3% over the week

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The Ibex 35 is up 0.84% ​​this Friday to 8,145.9 points but is down 2.92% in a week marked by decisions by central banks pledged to hike interest rates to bring down inflation.

This week, at an emergency meeting, the European Central Bank (ECB) agreed to speed up the development of a “new anti-fragmentation tool” aimed at calming tensions in government bond markets.

“Given the sharp increase in debt spreads in the peripheral countries, the ECB had to intervene. Investors are beginning to fear a severe economic slowdown that will cause the sale of all types of assets, from stocks to bonds to real estate assets and cryptocurrencies. Markets may not have a break until central banks stop raising rates,” said XTB analyst Joaquín Robles.

The Federal Reserve (Fed) also announced a 75 basis point rate hike in the US this week. “It will continue at this pace until there is clear evidence that inflation is easing. Higher financing costs are likely to cool demand over the next few months, although they will not affect the supply side, which remains the biggest problem,” the analyst said has pointed out.

For its part, the Bank of England hiked rates by 25 basis points for the fifth consecutive day, which was interpreted as “soft”, while the Swiss National Bank raised rates “unexpectedly” by 50 basis points for the first time since 2007, causing the Swiss franc since appreciated the most in 2015. The Bank of Japan distanced itself from the other central banks and decided to maintain its accommodative monetary policy.

At the corporate level, energy companies, despite their defensive nature, were hurt by rising bond yields. Banking also ended down more than 5% on the economic slowdown scenario, although it was able to benefit from margin gains fueled by interest rate hikes.

Thus, the Ibex 35 chains three consecutive weeks in “red” and is down 7.97% month-to-date. However, in this Friday’s session, which saw the second “quadruple witching hour” of the year, he said the sale of options and futures on indices and stocks in Europe as well as the sale of options and futures on Indices and stocks rose 0.84% ​​in the United States, which usually leads to high volatility in the markets.

In addition, the final reading of euro area inflation data for the month of May was released when the CPI stood at 8.1% of the year-on-year rate, compared to the 7.4% recorded in April and March, representing the highest price increase in the euro area of the entire historical series and is four times the 2% increase observed in May 2021.

The biggest gains on the last trading day of the week were Banco Sabadell (+5.68%), Cellnex (+5.13%), Bankinter (+5.06%), PharmaMar (+4.48%), CaixaBank (+3 .62%) and Amadeus (+3.51%).

Banco Santander shares are up 2.3% after announcing the election of Héctor Grisi to succeed José Antonio Álvarez as the banking group’s CEO, a decision subject to relevant approvals.

In contrast, the largest decreases were those of Repsol (-4.58%), Naturgy (-4.24%), Enagás (-2.94%), Inditex (-1.67%), Solaria (-1, 67%) and Endesa (-1.55%). ).

The rest of the European equity markets recorded falls in the case of London (-0.66%) and Paris (-0.06%) and rises in Frankfurt (+0.65%) and Milan (+0.43%).

On the other hand, a barrel of Brent quality oil, a reference for the old continent, stood at $114.04, down 4.82%, while Texas stood at $110.91, down 5 .67%%.

Finally, the euro was trading at 1.0473 “greenbacks” against the dollar, while Spain’s risk premium was at 114 basis points, with the interest required on the 10-year bond amounting to 2.734%.


The coming week will continue to be characterized by growth prospects and comments from central bank governors, as well as the release of macroeconomic data such as US home sales data, industrial production and the IFO index of business confidence in Germany, for which a sharp decline will occur after ECB-induced volatility and the new energy price increases are expected.

Likewise, from XTB, they point out that UK inflation data could mark a new yearly high, while the People’s Bank of China is expected to hold lending rates until there is better control over the rate of coronavirus infections. “The next week will continue to be characterized by strong volatility that could cause the Ibex 35 to lose 8,000 points,” estimates analyst Joaquín Robles.

Source europapress.es

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