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.