After the notable progression of the previous session, the Spanish stock index IBEX 35 started Tuesday without much change, in a day that could have a transitional tone pending new policies and macroeconomics.
Awaiting the US consumption deflator – an inflation indicator also known as PCE – on Friday and the first round of French elections at the end of the week, stocks could opt for caution.
Friday will also be marked by the publication of price indicators in several European countries, which will give indications on inflation throughout the euro zone, expected next week.
“Friday will be a busy day for inflation forecasts, with the publication of price indicators in Europe and the United States, for which slight declines are expected. This is the most important point, because if the inflation is indeed falling, expectations of rate cuts will be strengthened, which will further reactivate the stock and bond markets,” Bankinter said in a report.
“The week will depend on Friday’s inflation figures, which could stimulate the stock markets and bonds (…) if the tensions linked to the French elections do not spoil them, which is not improbable”, summarize these analysts.
The chief executive of the Euronext stock exchange platform said on Tuesday that the possibility of a politically extremist party – such as the far-right National Rally (RN), which is leading in polls – with little or no government experience coming to the power after the French legislative elections worries investors.
The main releases on Tuesday will be Spain’s revised first quarter GDP (0700 GMT) and the Conference Board’s US consumer confidence indicator (1400 GMT).
Overall, at 0705 GMT, Spain’s IBEX 35 was down 4.20 points, or 0.04 percent, at 11,167.90 points, while the FTSE Eurofirst 300 index of major European stocks was down 0.35%.
The banking sector, which saw strong gains on Monday amid higher rates for longer than expected at the start of the year, extended its gains on Tuesday.
Santander increased by 0.25%, BBVA by 0.34%, Caixabank by 0.76%, Sabadell by 0.22%, Bankinter by 0.36% and Unicaja Banco by 0.70%.
Among large non-financial stocks, Telefónica gained 0.17%, Inditex fell 0.68%, Iberdrola gained 0.12%, Cellnex fell 0.16% and oil company Repsol rose 1. 18%.
(Information by Tomás Cobos; edited by Benjamín Mejías Valencia)
