Consolidating expectations

30th November 2007, Comments 0 comments

30 November 2007, Madrid - Stock markets on Thursday consolidated the gains of previous sessions as mixed data from the other side of the Atlantic left investors and analysts scratching their heads about which way things will turn in the near future.

30 November 2007

Madrid - Stock markets on Thursday consolidated the gains of previous sessions as mixed data from the other side of the Atlantic left investors and analysts scratching their heads about which way things will turn in the near future.

The Ibex 35 ended the session with a gain of 0.58 percent to close at 15,656.60 points, leaving well behind it the small and medium cap segments of the market. Medium stocks added 0.24 percent, while small caps ended off 0.15 percent.

As in previous days, the attention of investors was focused primarily on the US economy and how Wall Street reacted to economic indicators. Yesterday saw the publication of revised third-quarter growth data showing an increase of one decimal point to 4.9 percent from original estimates.

That represents a 1.1-percent acceleration in US growth from the second quarter, although it did not put a damper on expectations for a new cut in interest rates. Those expectations were fanned further yesterday by data on underlying inflation, which accelerated to 1.8 percent in the quarter.

In addition, figures from the US housing sector are leaving many investors with the sensation that a further rate cut is necessary.

Yesterday, data was published showing a 1.7-percent increase in home sales in October - the worst growth in almost nine years despite a 13-percent year-on-year fall in home prices.

Another sign that an interest rate cut is expected came in the form of a decline in the returns on US 10-year bonds to 3.91 percent, after a rebound on Wednesday. Bond yields in Europe also ended lower.

In Spain, few paid much attention to data showing that inflation accelerated in November. Market turnover fell to €5.34 billion, of which €
4.67 billion was accounted for by open trades.

[Copyright EL PAÍS, SL./ RAFAEL VIDAL 2007]

Subject: Spanish news

 

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