The ECB’s decision to lend banks a massive EUR 350 billion failed to appease investors' fears about the extent of the impact of the credit crunch.
20 December 2007
MADRID - The European Central Bank's decision to lend banks a massive EUR 350 billion failed on Wednesday to appease investors' fears about the extent of the impact of the credit crunch. In Spain, property companies and builders suffered the brunt of those concerns, with the liquidity crisis adding to the impact of the end of a massive housing boom in Spain.
ECB chief Jean-Claude Trichet yesterday also made it clear that while inflationary risks remained on the upside there would be no salvation in the form of an interest-rate cut.
After timid gains early on in the wake of Wall Street's firm close the previous day, the Spanish stock market ran out of steam, and ended at its lows for the day after US stocks began heading south in yesterday's session.
The Ibex 35 closed down 0.67 percent at 15,177.10 points after an intraday high of 15,350.70 points. The Madrid general index dropped 0.72 percent to 1,645.20 points. Open-market deals in the continuous market came in at about EUR 4.7 billion. In the rest of Europe, Frankfurt lost 0.17 percent, Paris shed 0.02 percent, while London added 0.08 percent.
Heavily indebted property company Colonial led the Ibex 35 lower, with a loss of 6.23 percent. Construction groups Sacyr and Ferrovial were down 4.04 and 3.75 percent respectively.
Leading stock Telefónica fell 1.30 percent after announcing a restructure of its board.
Chemicals manufacturer La Seda de Barcelona dropped 8.21 percent after announcing a EUR 500-million capital hike to pay for the purchase of a Cepsa unit. The oil firm closed up 1.14 percent.
Vértice 360, the audio-visual production unit of Avanzit, added 28 percent on its market debut, while the parent company dropped over 19 percent.
[Copyright EL PAÍS, SL./ Adrián Soto 2007]
Subject: Spanish news