Friday’s drop is 1.25%
MADRID, 16 September (EUROPA PRESS) –
The Ibex 35 bid farewell to the 8,000 point level after falling 1.25% in this Friday’s session, putting the weekly decline at 0.6%, in an environment continued to be impacted by the energy crisis and the Fear of a further tightening is marked monetary policy in the light of new inflation data.
The week started with US inflation data for August coming in worse than expected as the CPI fell less than expected and the core rate rose more than expected. This led to sharp falls on Wall Street that eventually infected the old continent.
As explained by XTB analyst Joaquín Robles, investors fear inflation will take time to stabilize and central banks will be forced to continue aggressively raising interest rates to control it. The market will be excited for the next Fed meeting on September 21st.
“The market remains divided between those who believe we have already peaked in inflation and those who fear a prolonged recession. After the release, all investors are pricing in a 75 basis point hike at next week’s session and now there is a 30% who think the rise could be 100 basis points.
At corporate level, the banking sector again led gains for the week, with Bankinter and CaixaBank topping the list, coming very close to their highs for the year. “Investors continue to see rate hikes as a potential earnings boost, ignoring the possibility that a recession could slow banking activity and trigger bad loans,” the XTB analyst said. Inditex also did well with record results.
Referring to the energy crisis, Brussels proposed this week to put a cap of 180 euros per megawatt hour on the price of electricity produced by infra-marginal technologies such as renewable energies or nuclear energy.
According to Robles, this proposal could benefit renewable energy, which was pricing in an even smaller margin, while companies related to commodities were those that suffered the most. Repsol led the falls, hit by the oil dips and new taxes on its business in Spain.
The selective decline was 1.25% in this Friday’s session, which saw the third “quadruple witching hour” of the year, a phenomenon that normally sees high volatility in markets with stock and index futures falling and – Options created in Europe and the United States.
The selective Spaniard closed at 7,984.7 points in a session that published that the annual inflation rate in the euro zone hit a record 9.1% in August, up two-tenths from the July figure and confirming the first estimate of the data published two weeks ago, as reported this Friday by Eurostat, the Community’s statistical office.
On the plus side, Indra has emerged with a 2.32% lead after the nominating committee selected six candidates with a technological profile as potential independent directors and Amber Capital received executive approval to own 9.9% of the capital to achieve and become the company’s second largest shareholder. It was followed by Colonial (+1.6%), Fluidra (+1.34%), Acerinox (+1.2%), Arcelormittal (+0.82%) and Acciona Energía (+0.82%).
On the losing side, Cellnex (-5%), Sabadell (-3.77%), Naturgy (-3.14%), Repsol (-3%), Aena (-2.99%) and IAG (-2.96 %).
The rest of the European equity markets also ended the last session of the week in the red, down 0.62% in London, 1.31% in Paris, 1.66% in Frankfurt and 1.14% in Milan.
On the other hand, a barrel of Brent oil, a reference for the old continent, was priced at $92.14, up 1.48%, while the price in Texas was $86.12 after it was up 1.34%.
Finally, the euro traded at 1.0003 “greenbacks” against the dollar, while the Spanish risk premium was 115 basis points, with the interest required on the 10-year bond amounting to 2.891%.
FORECAST FOR THE NEXT WEEK
Next week will be dominated by the US Federal Reserve’s rate decision, which could surprise with a 100 basis point hike.
The market will also be watching the Bank of England, which decided to postpone the meeting following the death of Elizabeth II. The hike is expected to be 50 basis points.
“Given this environment, the Ibex 35 could continue to trade between 7,650 and 8,200 points next week,” predicted Joaquín Robles.