Europe gets a breather

19 February 2008

MADRID – For the first time in a number of months the European stock markets enjoyed a session free of pressure yesterday due to the closure of New York for a public holiday.

After a cagey start to the day the market picked up in the absence of major news on the economic front to deter investors from taking positions.

The Spanish blue-chip Ibex 35 ended what was a quiet session up 1.82 percent, which allowed the benchmark index to consolidate above 13,300 points, although this is a level with relative value.

The pattern was similar in the rest of the European bourses in the absence of the sway held by Wall Street on markets this side of the Atlantic. Paris put on 1.89 percent, Frankfurt gained 1.98 percent, while London added 2.75 percent.

One of the negative outcomes of the closure of Wall Street was a drop in trading volumes in the Spanish continuous market. Turnover amounted to only EUR 3.282 billion. Open-market deals dropped to EUR 2.567 billion, of which more two thirds was accounted for by five stocks: Telefónica, Santander, BBVA, Iberdrola and Repsol YPF.

The big gains yesterday by a number of stocks provided another issue for investors to take into account when deciding on their short- and medium-term strategies. The question to be answered is whether these stocks will be able to consolidate the higher levels they have reached within a context of lingering doubts about the immediate evolution of the economy.

The banks recovered strongly, with Santander up 2.50 percent, BBVA rising 2.45 percent and Popular 2.67 percent to the good. Market leader Telefónica added 1.43 percent.

Toll-road operator Cintra added 5.23 percent ahead of its results release.

Subject: Spanish news