Bourse lifts its spirit
29 November 2007, Madrid - Investors have increased their bets on another cut in US interest rates on the back of further negative news on the economic front that emerged yesterday. This served to encourage renewed buying interest in the stock market.
29 November 2007
Madrid - Investors have increased their bets on another cut in US interest rates on the back of further negative news on the economic front that emerged yesterday. This served to encourage renewed buying interest in the stock market.
The Spanish blue-chip Ibex 35 added 1.64 percent on Wednesday to end the session at 15,566.50 points. But it was the only major European bourse to close with gains of under 2 percent. The Ibex Medium Cap rose 1.13 percent, while the Ibex Small Cap added 0.49 percent.
The opening session on Wall Street instilled confidence in European investors who see the possible cut in interest rates as allowing the US economy to avoid a recession. It would also give the ECB room for thought in the case of any decision as to whether to raise rates in order to rein in inflation.
US durable goods orders dropped 0.4 percent in October, while existing home sales for the same month notched up their eighth fall in a row.
A drop of over 2 percent in oil prices also provided an unexpected catalyst for yesterday's rally.
The banking sector was underpinned by some enhanced stock recommendations and the possibility of merger and acquisition activity. However, many small and medium caps completely missed out on yesterday's recovery.
The Ibex 35 moved well above support levels and is now closer to resistance at 16,000 points, but with most of the money concentrated in the top three stocks in the index.
Total turnover in the continuous market dropped to €6.394 billion, but open-market deals climbed to €4.938 billion, of which 51 percent was accounted for by trades in Banco Santander, Telefónica and Banco Bilbao Vizcaya Argentaria.
[Copyright EL PAÍS, SL. / RAFAEL VIDAL 2007]
Subject: Spanish news