Banking stocks continue to fall

10th April 2008, Comments 0 comments

Share prices fall sharply as negative sentiment continues to surround the stock market.

10 April 2008

MADRID - The financial sector remains the focus of attention for stock market investors after warnings about increased problems in the medium term.

Most of the banking stocks in the Spanish bourse yesterday suffered from the negative sentiment toward the sector, with share prices falling sharply. As a result the domestic market as a whole was the worst performer in Europe.

The Spanish blue-chip Ibex 35 shed 1.17 percent to close at 13,600 points. That meant losses for the year so far once more amounted to more than 10 percent, which left the door open to a range of interpretations.

Analysts continue to weigh up the merits of different scenarios for the current crisis. But the battery of opinions doing the rounds is a source of confusion for investors, and is in itself an invitation to lighten up.

The IMF's downward estimates for the Spanish economy pointed to Spain suffering more than most other countries, but activity, nonetheless, is still expected to outpace that for the euro zone as a whole.

Investors and analysts had good reason to take the latest forecasts by the IMF seriously as oil prices shot up again in New York and London. A barrel of crude was changing hands at close to USD 112 in New York, while in Europe, Brent approached the USD 109 level, guaranteeing a further pick up in inflation and more tensions in the economy.

Sentiment was also negative in New York in the wake of bad inventory and wholesale sale figures for February, which had a knock-on effect on the European bourses.

Turnover in the Spanish continuous market picked up slightly from the previous session to EUR 5.104 billion. BBVA caught the attention with a number of block trades. Open-market deals totalled EUR 3.250 billion.

[El Pais / Rafael Vidal / Expatica]

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