Brexit drags down Spanish stock early gains

Spain’s benchmark stock market has seen a turnaround of earlier gains driven by investors’ bullish sentiment after the Spanish elections.

The benchmark market opened up 2.5%, but those gains progressively vanished and the Ibex 35 dropped by 1.6% as at 5.29pm on 27 July.

Stocks were dragged down by the equities with more exposure to the British market.

Thus, Iberia owner International Consolidated Airlines Group went down by 17.9% and Ferrovial fell by 6.8%. Last week’s Brexit decision also hit Banco Santander, with a loss of 2.4%.

Spanish banks Sabadell had a loss of 3.7% and BBVA shares decreased 1.6%, while Caixabank went down by 1.5%.

The political outlook remains very uncertain in Spain although the 26J vote gives greater legitimacy to the [conservative] Popular party. However, international investors have little visibility on the ability of political parties to form a government,” Philippe Ferreira, senior cross asset strategist at Lyxor told InvestmentEurope.

“Therefore, the Spanish equity market should reflect this uncertainty and still have a lower performance than European indices,” Ferreira said.

Alicia Villegas
Alicia Villegas speaks Spanish and Italian and is Iberia Correspondent for InvestmentEurope. She was shortlisted for the Rising Star Award at the British Media Awards 2017 and Writer of the Year at the PPA Independent Publisher Awards 2016. Previously, she worked for almost three years at the seafood business website Undercurrent News as a market reporter. In Spain, she also worked for more than five years for several media outlets.

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