• Consensus is that the central bank will start to reduce the size of its balance
  • Inditex will be catching the eye on Wednesday as it announces results
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The Ibex 35 closed moderately higher on Tuesday (+0.39%, 10,378.40 points). The Spanish exchange keeps attempting to get over the short term resistance of 10,400 points, supported by positive behaviour of the likes of Repsol (+1.06%), Santander (+0.89%), BBVA (+0.62%), Inditex (+0.46%), Telefónica (+0.32%) and Iberdrola (+0.3%).

IBEX 35

  • 11.154,600
  • 1,56%

However, the highest stock in the Ibex was Siemens Gamesa (+3.36%) which is attempting to reverse its recent poor performance. IAG was up 2.45% as Ryanair struggle with massive cancellations of hundreds of flights.

The worst performers on Tuesday were ArcelorMittal (-1.72%) and Aena (-1.55%), followed by Melia Hotels (-1.14%) and Caixabank (-0.84%).

FED MEETING ARRIVES

At the international level, the two-day Federal Reserve meeting has arrived, with its results being seen on Wednesday. It’s expected that chair Janet Yellen will announce dates for the reduction of the body’s balance. Undoubtedly it’s the major event of the week, which will end with German general elections on Sunday.

INDITEX RESULTS

Wednesday will also see quarterly figures arrive from Inditex. The strength of the euro is likely to affect the Galician company’s accounts, but after falling in recent weeks investors may see it as an opportunity to buy.

Given the weight of Inditex in the Ibex, investors continue to give special attention to what the company has to say. Morgan Stanley’s analysts have cut its recommendation to ‘hold’. On Tuesday its stock rose 0.46% to 32.68 euros.

In the geopolitical arena, North Korea and Catalonia remain prevalent. A new report from Credit Suisse warns that tension between Spain and Catalonia will continue to grow.

US President Donald Trump added fuel to the North korean fire in a speech at the UN General Assembly, referring to Kim Jong-un as ‘rocket man’, and saying that the US would ‘totally destroy’ North Korea.

Regarding the macro data for the day, German economic sentiment was published by ZEW, rising to 17 points in September compared with the freefall to 10 points in August.

TECHNICAL ANALYSIS

“We have been seeing fluctuations for the last six sessions within a narrow range of prices between 10,290 points and 10,400. In reality, it can be said that for the most part of the session we have been aware of Inditex, which began almost 3% lower, but eventually finished higher,” said Bolsamanía analyst José María Rodríguez.

“We will have to be on alert to tomorrow’s results from the textile company, which will arrive ahead of the opening bell. Technically we continue to hope that we can get over the resistance of 10,400 points. In order to make a jump forward, we would have to clearly jump over this hurdle.”

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