More volatility

15 February 2008

MADRID – Volatility is becoming a daily feature of the stock markets as a result of the speed at which events develop and the anxiousness on the part of some investors to take advantage of this.

The European bourses kicked off yesterday’s session under the influence of Tokyo, which celebrated the recovery in Japanese economic activity with a gain of 4.27 percent. Bit by bit, European investors focused on the fact Japan is in a different situation from that of the Western economies, and initial gains in the region’s markets – which in the case of the Spanish blue-chip Ibex 35 amounted to as much as 1.43 percent – gradually disappeared to the extent that the main indexes closed flat.

The Ibex 35 ended up 0.35 percent in line with most of the European bourses.

Remarks by US Federal Reserve Chairman Ben Bernanke that the situation in the world’s largest economy had deteriorated did not help in the least, particularly as they coincided with a survey by the ECB showing lower growth expectations for the euro zone and higher inflation.

In the past few sessions, the fluctuations in the Ibex 35 have all taken place above support at the 13,000-point level, reinforcing the consolidation of the market. However, this base remains precarious as it depends on too many external factors.

The expiry today of futures and options contracts for this month could help clear the short-term horizon, but will not lift big doubts about the evolution of the economy despite the offer of support made by the Federal Reserve chief.

Turnover in the Spanish continuous market rose to EUR 5.205 billion as a result of deals linked to the derivatives market. Open-market operations fell to EUR 3.786 billion.

Subject: Spanish news