Seeking shelter in a storm

8 January 2008

MADRID – The Spanish stock market on Monday managed to close higher for the first time this year after five sessions of losses in a row. But it was a mixed performance overall. On the eve of the January sales period, there was some bargain-hunting in stocks viewed as safe havens after the accumulation of losses, medium-sized banks, and property and construction companies remained under the cosh.

The fall in the price of crude oil helped buck up investor confidence, which has been depressed by fears of recession in the United States accompanied by persistent inflationary pressure. But an incident in the Persian Gulf at one point threatened to scupper yesterday’s timid recovery. Wall Street initially reacted badly to news that a number of Iranian launches had harassed three US naval vessels in the Strait of Ormuz, which were on the point of opening fire before they backed off.

The blue-chip Ibex 35 closed up 0.44 percent at 14,667.00 points after trading in a range of 14,529-14,701. The Madrid general index added 0.34 percent to 1,586.77 points. Open-market deals in the continuous market came to about EUR 4.7 billion.

In the rest of Europe, both Frankfurt and Paris were up 0.11 percent. London missed out on the recovery, closing down 0.20 percent.

Telefónica underpinned the domestic market, adding 3.69 percent. Investors also sought refuge in power companies, with both Iberdrola and Unión Fenosa up 1.74 percent.

Iberia was the biggest blue-chip gainer on the day, adding 3.73 percent on a report of renewed takeover interest in the leading Spanish airline.

Among property firms, Colonial remained under pressure, falling 3.80 percent. Bankinter dropped 5.15 percent, while Banco Sabadell fell 2.60 percent.

Subject: Spanish news