Feasting on the Fed
The European stock markets posted healthy gains yesterday on the back of expectations the US Federal Reserve will opt for a further cut in interest rates.30 January 2008
MADRID - The European stock markets posted healthy gains yesterday on the back of expectations the US Federal Reserve will opt for a further cut in interest rates.
The main beneficiaries of the recovery in the Spanish bourse were construction companies and banks, which have been the two sectors under most pressure in the recent upheaval in global stock markets.
The debate yesterday centred on the magnitude of the cut by the Fed rather than on whether the US central bank would decide on further easing today. Some investors were hoping for a cut of 50 basis points but strong durable goods orders in November could tip the balance in favour of a smaller cut.
The Spanish blue-chip Ibex 35 closed the session up 1.69 percent at 13,246.60 after trading in a range of 13,309-13,050 points. The Madrid general index added 1.71 percent to 1,434.27. Open-market deals in the continuous market amounted to EUR 3.9 billion.
In the rest of Europe, Frankfurt added 1.09 percent, Paris put on 1.92 percent, while London was up 1.40 percent.
Among the builders, Sacyr added 6.08 percent, Ferrovial put on 4.00 percent, while FCC climbed 3.23 percent. The performance of smaller construction group OHL merited special mention. Its share price climbed 9.37 percent after it announced it had won a major contract in Qatar.
Budget airline Vueling was another of the session's features. After confirmation that its leading shareholder is in talks with rival carrier Clickair, Vueling's share price soared 22.21 percent.
Among the banks, Bankinter added 5.00 percent, while the two biggest lenders Santander and BBVA were up 0.58 percent and 1.85 percent respectively. Telefónica added 1.39 percent.
[Copyright EL PAÍS / Adrián Soto 2008]
Subject: Spanish news