In 1997 the Ibex 35 passed 7,000 points for the first time in its history, and for the first time in over a decade, the index decided to say goodbye to this level yesterday after going through another volatile day of trading. The Spanish index began the day with slight gains that, for a short time, put it up 0.98% on the day. The modest increases followed high demand for Spanish ten- and two-year bonds. But nothing lasts forever, especially hints of good news in Spain.
A rumor that ratings agencies might lower France's credit ranting, according to a report published by Citi, was the reason that investor views shifted from optimism to pessimism over the course of the day. Disappointing economic figures from the US Federal Reserve and an uptick in US unemployment did not help matters.
All European stock indexes closed the day with 1% declines, but once again, the Ibex performed worse than the rest. It shaved 2.42% on the day and lost support at the 7,000-point psychological level, closing the day at 6,908 points and getting ever closer to the post-Lehman low of 6,817 points.
This happened despite the European Union denying another rumor that it was now talking about a recovery plan for the Spanish banking sector. "We are not planning to enacting any sort of bailout that would recapitalize Spanish banks," affirmed EU spokesperson Olivier Bailly.
