Ibex exceeds 8,600 points, driven by economic optimism; pending Fed market

Apr 6 (Reuters) – The main Spanish stock index on Tuesday surpassed 8,600 points on the wave of global optimism about the economic recovery, with sovereign debt markets taking a breather while waiting for possible changes in the outlook for the Fed.

The markets returned from the Easter break, betting strongly on an economic rebound driven by the advance of vaccination against COVID-19, physical stimuli and a solid infrastructure bill under debate in the United States, while maintaining the expectation of the next batch of business results.

“Investors are taking a breather and looking forward to results, a pattern we see almost every season,” said Oliver Pursche, president of Bronson Meadows Capital Management in Fairfield.

“The economic outlook has improved a lot in the last three months,” added Pursche. “There is a general feeling globally that things are getting better and that they will get better quickly.”

On the more immediate horizon, the minutes of the last meeting of the US Federal Reserve on monetary policy will be released on Wednesday, in which investors will track any possible change in the economic outlook of the US central bank.

“(Investors) expect little change, a Fed that remains supportive and accommodative, sees little inflation risk and, ideally, an improvement in the outlook for economic growth,” Pursche said.

In a display of this expectation, US Treasury yields fell on Tuesday after a month of sharp gains, with 5-year bonds leading the losses. Investors considered the scenario based on a monetary tightening earlier than expected by the Fed too aggressive.

In this context, the Ibex-35 closed with a rise of 57.00 points on Tuesday, 0.66 percent, to 8,634.60 points, while the index of large European stocks FTSE Eurofirst 300 rose 0.65% .

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In the banking sector, Santander rose 1.44%, BBVA scored 1.82%, Caixabank lost 0.08%, Sabadell gained 2.26%, and Bankinter dropped 0.85%.

Among the large non-financial securities, Telefónica fell 0.05%, Inditex advanced 0.42%, Iberdrola revalued 2.36%, Cellnex gained 0.52% and the oil company Repsol lost 0.23%.

At the top of the index, the hotel company Meliá stood out, scoring 3.91% on the day that British airlines expressed their hope that international flights with the United Kingdom will resume from May 17.

At the other end of the index, the group with exposure to renewable energies Acciona stood out, which corrected 4.86%, partly due to taking profits after rising 23% so far this year and 56% in the last six months , while the market studies which companies will benefit the most from Joe Biden’s infrastructure plan in the United States.

(Information from Darío Fernández; additional information from Stephen Culp; edited by xxxx)