Little room to react

29 January 2008

MADRID – The stock markets have been unable to shake off the weight of uncertainty regarding their ability to weather the current crisis without incurring too much damage.

The Spanish blue-chip Ibex 35 closed yesterday down 0.87 percent, which smacked of something of a triumph given that it was down by as much as 2.50 percent at one point, which pushed it below 13,000 points. The benchmark index, however, managed to hold onto that level by the end.

Investors do not know where to anchor themselves in the short term, aware as they are that the first effects of the measures adopted in the United States aimed at trying to avoid a recession there will not start to be seen until at least two months in the best of cases.

For the moment, one of the few things that appear clear within a situation dominated by confusion is that the 13,000-point level is starting to consolidate itself as a reference point to take into account.

However, many investors currently give little importance to technical analysis because of the total dependence of the Spanish market on a global situation in which its ability to influence events is practically zero. The Spanish stock market is pulled along by movements whose causes are difficult to identify, and, therefore, to evaluate in time.

Figures for money supply in the hands of the public and some short-term assets in the euro zone in December were released yesterday. These saw a slowdown in growth to 11.5 percent from 12.3 percent in November, which takes some of the upward pressure on prices on a quarterly basis, although the upward trend remains intact.

Turnover in the Spanish continuous market was EUR 5.634 billion.

Subject: Spanish news