The Ibex-35 retains the positive tone but the fear of the ECB contains the enthusiasm

The Ibex-35

Spain’s selective closed in positive territory on Tuesday after a day of indecision, as investors digested macroeconomic data from the euro area and its possible impact on the monetary policy of the European Central Bank (ECB).

Prudence was also evident in the United States, where the Dow Jones and the S&P 500 traded with mixed trends, following the release of General Electric (NYSE) results:GE) and Johnson & Johnson (NYSE:JNJ).

The composite reading of the euro area PMI index, considered a good barometer for the region’s economic health, surprised the markets, returning to above fifty points after seven months, the threshold that separates contraction from growth.

Although the business survey points to a less sharp slowdown than expected, the reading for the markets was not so positive, since the resilience of the economy may allow the European Central Bank to continue with sharp increases in interest rates – generally poorly received in the stock markets – in order to curb inflation.

Traders are considering a 50 basis point hike by the ECB at next week’s meeting, while on the other side of the pond expectations point to a 25 basis point to an increase of 25 basis points on hopes that the Federal Reserve will loosen the pace of tightening.

“The Fed has been more hawkish in its monetary policy at the beginning and now it is the turn of the ECB, which has been delayed in this regard,” said Javier Etcheverry, head of ActivTrades.

“The scenario that the market is pricing in is clear. But let’s prepare the ships in the event that, in the face of strong bullish momentum, Powell’s message is tougher than expected, which could destabilize investors’ tranquility,” he added.

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The Spanish stock market touched the floor of the day shortly before 12, after knowing the European PMI, but rallied in the afternoon, before an equivalent indicator in the United States that still showed levels of contraction in business activity, which would lead to a containment in the Fed’s rate hikes.

At the end of the session, the selective Spanish stock market Ibex-35 closed with a rise of 23.00 points on Tuesday, 0.26%, to 8,967.10 points, while the index of large European stocks FTSE Eurofirst 300 lost 0.20%.

Of the 17 sessions held so far in 2023, the Ibex-35 It has only closed three of them in negative and accumulates a rebound of 9% in January. With five sessions left to close the month, it represents the best monthly evolution since November 2020, when the first positive results in COVID-19 vaccine trials were known.

In the banking sector, Santander (BME:SAINT) rose 0.27%, BBVA (BME:BBVA) fell by 0.29%, Caixabank (BME:CABK) advanced 0.30%, Sabadell (BME:KNOW) gained 0.80%, Bankinter (BME:BKT) was left 0.09% and Unicaja Banco rose 0.67%.

Among the large non-financial securities, Telefónica (BME:TEF) fell by 1.23%, Inditex (BME:ITX) advanced 0.81%, Iberdrola (BME:IBE) rose by 0.28%, Cellnex (BME:CLNX) gained 0.77% and oil company Repsol (BME:REP) lost 1.55%.

Outside the Ibex 35, railway material manufacturer Talgo (BME:TLGO) was up 7% after confirming the agreement with the French company Le Train for the construction of high-speed trains.

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