Ibex bows to crude reality as stocks fall
8 November 2007, Madrid - Just a day after the blue-chip Ibex posted a new all-time high, the Spanish stock market was forced to bow to reality yesterday, as oil prices stared the $100-mark in the eye.
8 November 2007
Madrid - Just a day after the blue-chip Ibex posted a new all-time high, the Spanish stock market was forced to bow to reality yesterday, as oil prices stared the $100-mark in the eye.
Factors such as the impact of soaring oil prices on inflation and the euro's strength on exporters, not to mention the US subprime crisis, which investors had previously chosen to ignore, suddenly became good reasons for cashing in on gains.
A fall in US weekly oil reserves was enough to push the price of a barrel of crude to a record $98.62 per barrel. Meanwhile, the dollar fell to historic lows of $1.4730 against the euro amid fears that China might start switching out of the greenback and into the single European currency.
However, it could have been worse for the local bourse if market heavyweight Telefónica had not recovered some ground later in the afternoon.
The Ibex 35 closed down 0.34 percent at 15,841.90 points after a low of 15,640.20 points and a high of 15,955.30 points. The Madrid general index fell 0.44 percent to 1, 716.11 points. Open-market deals in the continuous market amounted to €5.3 billion.
In the rest of Europe, London bucked the trend, adding 0.58 percent. Paris shed 0.46 percent, while Frankfurt was down 0.35 percent.
Telefónica shed 1.25 percent. The stock has put on about 35 percent in the past three months. Oil-price blues were a source of joy for the Spanish renewable-energy sector. Wind-turbine manufacturer Gamesa continued to outperform, adding a further 1.26 percent yesterday. Biofuel producer Abengoa was up as much as 9 percent at one point after a report, subsequently denied, that an investment fund headed by Al Gore had bought into the company.
[Copyright EL PAÍS, SL. /Adrián Soto 2007]
Subject: Spanish news