The Spanish index remains above 19,200 points despite the escalation of attacks between the US and Iran. Investors are focused on the upcoming quarterly earnings reports and the ECB meeting on Thursday.
The Ibex 35 closed Monday's session with a minimal drop of 0.05%, down to 19,206.9 points, after having briefly recovered the 19,300 mark during the day. Geopolitical tension in the Middle East continues to weigh on investor sentiment, but economic fundamentals and the anticipated earnings season keep the index in a consolidation phase.
The escalation in the Middle East affects the market
The US military has completed a new wave of attacks against Iran, marking the ninth consecutive night of military operations under the pretext of curbing Tehran's ability to attack ships in the Strait of Hormuz. Meanwhile, the Islamic Revolutionary Guard Corps of Iran has announced attacks against US troops and military assets in Jordan and Kuwait, claiming to have killed dozens of soldiers at the Al Azraq airbase.
This open conflict keeps energy markets on edge, although Brent crude oil barely fell by 0.02%, to 88.07 dollars per barrel, while West Texas Intermediate (WTI) stood at 82.32 dollars. The Spanish risk premium slightly decreased to 45.8 basis points, and the ten-year bond rose to 3.608%.
Corporate earnings and ECB set the weekly agenda
Despite the geopolitical noise, investors are focusing on the upcoming corporate earnings reports starting this Wednesday with Banco Santander, followed by Bankinter on Thursday and Banco Sabadell and Mapfre on Friday. Additionally, the European Central Bank (ECB) will meet on Thursday to decide on its monetary policy ahead of the summer break. Renta 4 analysts highlight that "the fundamentals remain favourable: inflation is moderating, economic activity shows strength, corporate earnings are positively surprising, and expectations for interest rate hikes are fading."
In the corporate arena, Cirsa has acquired a majority stake in Sociedade Figueira Praia, owner of the Casino Figueira in Portugal, one of the country's most iconic establishments. Meanwhile, engineering firm TSK has received 82 million dollars (71.7 million euros) for financing a 150-megawatt solar plant in Panama, which boosted its shares by 6.9% on the Continuous Market.
Notable stocks in the Ibex 35
Within the index, the biggest gains were for Grifols (+3.72%), Solaria (+1.78%), Indra (+1.55%), Repsol (+1.43%), Acciona (+1.39%), and BBVA (+0.68%). On the downside, the largest declines were for IAG (-1.19%), Telefónica (-1%), Fluidra (-0.94%), Aena (-0.92%), Redeia (-0.90%), and Cellnex (-0.81%).
Across the rest of Europe, stock markets closed mixed: London and Milan fell by 0.71% and 0.04%, respectively, while Paris and Frankfurt rose by 0.02% and 0.06%. The euro depreciated by 0.24% against the dollar, to 1.1412 dollars per euro.
For investors, the week promises movements based on bank earnings and the ECB's decision. The psychological level of 19,200 points remains a key support, and any news regarding the conflict in the Middle East could generate additional volatility. It is advisable to pay attention to the central bank's statements on Thursday, which could set the summer trend.
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