The Spanish stock market is grasping for something to hold on to. Even the heavy hitters on the Ibex 35 cannot impress investors, who continue to sell and sell. The index shaved 3.99% yesterday and settled at 7,079 points. Now that the index has fallen below the 7,100-point level and the European Central Bank (ECB) has stated that it will not buy more Spanish debt for the time being, experts predict that the Ibex will have support at 6,700 points, which is a low not seen since 2009.
Excessive, irrational, incomprehensible. These are some of the words that experts are using to explain yesterday?s trading session during which the Ibex 35 endured its biggest day of losses since November 2011 and five companies closed beneath their five-year average. The behavior led Ecotrader to close half of the long positions that it had open on the Spanish stock market one day early and to leave the rest up to what happens at the end of the week.
?It is surprising that the stock market is falling when Spanish ten-year bonds are reasonably stable and the Treasury is about to issue a round of treasuries and notes that ought to be pretty good and profitable,? said Ignacio Méndez, an analyst from Mirabaud. The difference between yesterday?s declines and previous times is that yesterday?s happened when Spanish bonds were at 5.8% and its risk premium, although it dipped below 400 basis points, closed at 410.
