- In Asia the falls have also been over 3% on average
- The Ibex is now at the 9,600 -9,500 support
The Ibex 35 closes the week losing a 5.6% an barely maintains the 9,600 points. This Friday, the index has fallen a 1.2% and has fallen to 9.639 points being dragged by the bank. After this close in red, the Ibex closes its worst week since Brexit 2016 when it fell 7%.
- 11.154,600
- 1,56%
In this session the banks have led the losses and have dragged the index down. Bankia (-2.12%), Bankinter (-2%), BBVA (-1.82%), Sabadell (-1.65%) and Santander (-1.7%) have led the losses although also Endesa (-2%).
Also closing in red, Iberdrola (-1.9%) in a session where black rock has bought 2% of its capital and has accumulated 5% valued in almost 2,000 million euros. Telefónica with its downward drip has fallen 1.52% down to 7.53 euros despite Jefferies improving its target price of 8.4 euros.
ArcelorMittal is also in the lowest part of the table despite Banco Sabadell improving the target price to 33.5 euros. The company has closed this Friday with a fall of 1.15 down to 26.21 euros.
Meanwhile, in green there has barely been a handful of values. Meliá Hotels has been the highest riser with an increase of 1.66%. Acciona follows (1.05%) that had been suspended of listing early this morning after the reveal that it was negotiating with Contourglobal to sell its business of thermosolar plants, valued in 1.5bn euros. The electric company has pointed out the negotiations are suspended.
A CORRECTION OR SOMETHING ELSE
While the experts keep churning out theories trying to figure out of this is a “healthy temporary correction” or the start of something worse, the stocks still fall and proving right those who think we’re on the brink of a darker period and a problematic situation that has a lot to do with the return of volatility. All in all, the Ibex drops in the accumulated of these past four sessions a 4%. Behind us is the level of 10,000 and very far away the resistance level of 10,600 points.
“It looks like a small stop in the variable rent of the mid week was the eye of the storm since once again the increase of bonds profitability has caused a new wave of sales in all sectors and not only in the US”, points out Michael Hewson, chief analyst of CMC Markets in the UK. This expert adds that the worries of an increase of interest rates quicker than expected weren’t helped this Thursday with an unexpectedly aggressive inflation report of the Bank of England. Also the weekly dole requests on the other side of the Atlantic fell dramatically, “what strengthened the rigidity of the US labour market, and could be a greater pressure in the salary raise in the next few months”.
The VIX index shot another 26% up to 34 points. Known as the fear or panic index this indicator continues registering an extreme behaviour after going up this Monday a record breaking 115% up to 37 points.
EUROPEAN STOCKS
After the chrases from Wall Street, the European stocks aren’t working well either. The losses vary between 1.5% of the CAC and 1% FTSE with none of the biggest indexes closing in green.
As for the agenda of the day, it’s quite calm this Friday. The French industrial production is up a 0.5% in December vs the 0.1% expected. Also the industrial production in the UK is up 0.0% under 0.3% expected and manufacturing in the UK is up a 1.4% vs the 1.2% expected.
TECHNICAL ANALYSIS
After this session, the Ibex 35 has finished the week under 9,900 points. According to José María Rodríguez, technical analyst of Bolsamania, the index has closed these 5 session clearly under the level, the resistance closer to the index. Now the support is at 9,600 and at 9,250 points. Nevertheless the analysts think “we haven’t reached rock bottom”: “There is fear but there is no seller panic yet in the European stocks or on the other side of the Atlantic”.
Rodríguez points out the bad behaviour of Telefónica as one of the biggest burdens of the index. “It looks like it wants to test the support it has in 7.3 euros and underneath the 2016 lows of 6.85 euros” points out the analyst.
