Off on the wrong foot

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The Spanish stock market got off to a bad start to the trading year.

3 January 2008

MADRID - The Spanish stock market got off to a bad start to the trading year with property companies and builders taking the brunt of the sell-off as the blue-chip Ibex 35 just managed to hold onto the 15,000-point level at the close.

The latest US economic figures sent a chill across the Atlantic which affected the European bourses as a whole. The US factory sector shrank in December for the first time in a year, reviving fears of a recession in the world's largest economy. The ISM index fell to 47.7 percent from 50.8 percent in November, its lowest reading since April 2003.

Rises in oil prices amid enhanced geopolitical concerns also undermined sentiment.

The Ibex 35 closed down 1.18 percent at 15,002.50 points after trading in a range of 14,971-15,186 points. The Madrid general index dropped 1.05 percent to 1,624.84 points. Open-market deals in the continuous market came to about EUR 3.4 billion.

In the rest of Europe, Paris shed 1.14 percent, Frankfurt gave up 1.47 percent, while London was down 0.62 percent.

Builders Sacyr and Ferrovial fell 5.38 and 3.20 percent respectively while trading in property company Colonial was suspended. The Bank of Spain said yesterday that activity in the construction sector continued to fall in the last part of 2007. At the same time, house prices slowed to levels below the rate of inflation in the fourth quarter of the year.

The CNMV called a halt to trading in Colonial before the opening as it sought an explanation for the plunge in the stock at the end of last year.

Santander shed 1.35 percent after the Financial Times reported Spain's leading bank could renew its interest in British lender Alliance & Leicester.

[Copyright El Pais / ADRIAN SOTO 2008]

Subject: Spanish news

Subject: Spanish news

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