Market loses its appeal

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The Spanish stock market continues to search for firm support, although the losses it is suffering are not particularly great.

21 December 2007

MADRID - The Spanish stock market continues to search for firm support, although the losses it is suffering are not particularly great. The domestic bourse yesterday was once again out of synch with most other markets, despite the fact that reverses of leading stocks were not severe.

The Spanish blue-chip Ibex 35 ended the session down 0.24 percent at 15,140.20 points. That was clearly below support at 15,200 points, which has now become the level the market has in its sights. During a few moments yesterday the Ibex 35 managed to move above that mark.

As in the previous session, medium and lower caps suffered the brunt of the losses. The Ibex Medium Cap fell 1.15 percent, while the Ibex Small Cap shed 1.51 percent.

Merger and acquisition deals spiced up what was otherwise an anodyne session. These took the shape of PRISA's offer to buy the shares it does not already own in Sogecable, and the possibility of ACS further increasing its stake in Unión Fenosa as a defensive mechanism.

The economic indicators released yesterday presented a contradictory picture of where the US economy is going. GDP growth in the third quarter was revised upward to 4.9 percent from an initial estimate of 3.8 percent, while the Federal Reserve Bank of Philadelphia index of factory activity in the region gave a negative reading of 5.7 points in December compared with a positive reading of 8.2 points in November. At the same time, the latest weekly jobless claims rose by 12,000 from the previous week.

Calm of a sort was restored yesterday to the debt markets which have been under pressure recently, with yield on the 10-year government bond falling slightly.

[Copyright EL PAÍS, SL./ RAFAEL VIDAL 2007]

Subject: Spanish news

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