The selective has lost about 2% due to the drop in Inditex and tourism values
From comfortably over 9,200 points to 9,000 at risk. The Ibex-35 is headed for its worst session of the year this Friday, with a 1.8% drop that wipes out any hopes of maintaining its bullish weekly streak.
After the rally at the beginning of the year, investors are taking the opportunity to collect benefits, especially in companies that showed better behavior in 2023. The selective market is mainly damaged by the downturn in the Inditex price. The textile giant lost more than 4.5% in the worst moments of the session, after reaching a salary agreement for its store employees.
The big tourism companies are others that exert the most downward pressure, with losses of 4.5% for IAG and more than 3.5% for Aena, Amadeus and Meliá.
It is foreseen that the Ibex will moderate its declines as the session progresses, pending Wall Street’s behavior. But profit-taking seems inevitable. And that the selective Friday, with the support of big names like Repsol, which is separate from the red numbers with a strong increase of 3%, benefited from the recent increase in oil prices.
Amid Russia’s production restrictions, a barrel of Brent, a reference in Europe, is up nearly 2% to above $86, while US West Texas costs close to $80.
With few macroeconomic references to catalyze the markets, investors have been focusing on central banks’ fight against inflation for several days now. Link Securities analysts point out that investors on Wall Street are already accepting that the battle against high prices will take longer than initially priced in.
And the same is happening in Europe. “The ECB will continue to raise interest rates by half a percentage point at least in the next two meetings,” they estimate. “The bond market of the region is already starting to reflect this opportunity, while the variable income market has not yet picked it up, given the strength shown by the prices of some assets/sectors that this scenario does not benefit at all,” emphasize.
This premise of longer interest rates – and the fear of a negative impact on the pace of economic recovery – is what drove bond market yields to rise this week. In the US, the yield on the 10-year bond has risen from 3.40% to 3.70% in just five sessions. And in Europe, German bond yields are above 2.35%, down from 2% that were barely higher last week.
Against this backdrop, investors are already starting to look to US CPI data due to be released next Tuesday, which will undoubtedly shape stock market behavior in the near term.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
