Show of volatility
The stock markets yesterday put on another display of volatility as a result of the uncertainty that has gripped the investment community.24 January 2008
MADRID - The stock markets yesterday put on another display of volatility as a result of the uncertainty that has gripped the investment community.
The Spanish blue-chip Ibex 35 lost 4.56 percent to close at 12,254.60 points.
Most of the European bourses opened higher only to lose strength bit by bit until ECB chief Jean-Claude Trichet appeared on the scene. Trichet's remarks, indicating that the European bank would not follow the lead of the US Federal Reserve in cutting interest rates, put a damper on proceedings. Trichet is opting to run the risk of hitting an economic crisis with high interest rates rather than allow inflation to continue upward, a stance that sat badly with the stock markets.
The fluctuations in the Ibex 35 in the past few days are begin to trace points of resistance and support, which as yet remain very tentative. The 12,000-point mark has been established as relative support thanks to the rebound witnessed off this level on Tuesday, while immediate resistance lies at 13,000 points, which the Ibex 35 managed to break through briefly at the opening of yesterday's session. However, analysts insist it is too early to set these levels in stone as more input is required.
The German government's downward revision to its forecast for GDP growth for this year from 2 percent to 1.7 percent reflected the tensions companies and consumers will face while interest rates remain at 4 percent.
Activity in the Spanish continuous market slowed yesterday suggesting that investors are taking something of a breather as the Ibex 35 starts to move with relative calm within new trading limits. Total turnover came to EUR 7.188 billion, of which EUR 6.600 billion was accounted for by open-market deals.
[Copyright EL PAÍS / RAFAEL VIDAL 2008]
Subject: Spanish news