Money rains on banks
The ECB yesterday decided to inject EUR 350 billion into the euro-zone financial system to allow banks to end the year without liquidity worries.
19 December 2007
MADRID - The ECB yesterday decided to inject EUR 350 billion into the euro-zone financial system to allow banks to end the year without liquidity worries and at reasonable rates. The stock markets viewed the figure as excessive, but came to the conclusion the ECB was looking to put an end to uncertainty surrounding the liquidity system once and for all.
The markets' reaction to this decision lent toward neutral, or at least failed to match the magnitude of the operation. This possibly reflected investors failing to come to grips with the causes and possible consequences of the background problem.
The Spanish blue-chip Ibex 35 was modestly ahead for most of the day before ending the session down 0.24 percent at below 15,300 points.
The latest falls put the Ibex 35 in a more delicate situation of lying between two support levels, the solidity of which has been thrown into question in the past few days. The expiry on Friday of futures and options contracts for this month is a source of many incognitas for retail investors.
Turnover in the continuous market climbed to EUR 7.440 billion due to a number of block deals in the three biggest caps. Open-market deals also picked up to EUR 4.389 billion, with most of the action concentrated in market heavyweights. Telefónica, Santander, BBVA and Iberdrola accounted for half of the total.
There were few economic indicators released yesterday and those which were published, such as housing starts and building permits in the United States for November, confirmed the world's largest economy was on a downturn. New construction of single-family homes and permits for these dropped to their lowest levels in 16 years.
[Copyright EL PAÍS, SL./ RAFAEL VIDAL 2007]
Subject: Spanish news