Long
IBEX 35: Possible brake to the tariff 'whiplash'.
The announcement of new tariffs by the Trump Administration has unleashed a wave of uncertainty in global markets. With a 10% across-the-board tariff in the US, 20% for the European Union and up to 34% for China, these measures have ignited fears of stagflation in the US, which has repercussions internationally and directly affects investor confidence.
Initial impact on the IBEX 35
Last Friday, the Spanish stock market suffered a historic fall, with the IBEX 35 losing almost 6% to around 12,400 points. This plunge, the worst recorded since the beginning of the covid crisis, wiped out tens of billions of euros of market capitalization, highlighting the strong impact of trade policies on the Spanish market.
Impact on the banking sector
The banking sector, a fundamental pillar of the IBEX 35, has been particularly hard hit. Entities such as Sabadell, Santander, BBVA, CaixaBank, Unicaja and Bankinter have suffered double-digit losses. Rising costs and pressure on profit margins have caused this sector to be severely impacted, reflecting the market's sensitivity to global instability.
Persistence of the downtrend
Although Friday's plunge had already set a negative precedent, the downward trend continued on Monday. Investors continue to reduce positions in risky assets, confirming the persistence of uncertainty. The lack of progress in international negotiations and the possibility of new countermeasures reinforced the pessimism in the market, keeping the IBEX 35 down at the opening of the session.
Reaction in other markets and safe-haven assets
The uncertainty generated by the tariffs has affected other financial indicators. Sovereign bonds are showing declining yields, which is evidence of the search for safer assets. Surprisingly, even gold-traditionally the safe haven of choice in times of high volatility-has lost ground, falling about 2.5% from its recent highs. Oil prices have also fallen, reflecting fears of a global recession and lower energy demand.
Technical Analysis IBEX35
The momentum started on January 27th was stopped in March with two double tops. The second one lateralized the index and after the news caused by the tariff wave, on Friday April 4 a death cross was managed that has led the index the same day in a purely bearish session. The closing of the session took place in a context of a 4-hour candle with a lot of wick, bringing the chart closer to 1-hour candles, the last hour of the session a bearish gap was managed that left the price at the lows of the whole year at 11,930 points. The 12.00 zone seems to have acted as a temporary brake. The RSI in Friday's session moved into very high oversold territory, reaching 14.53%. The Spanish premarket hours indicate that the index could be trading around 11,963 points. The POC (Point of Control) zone of the previous weeks is located at 13,277 points. If the index holds its price at the current supports we could see a recovery in the direction of the support lost on Friday at 12,518 points in the current week due to the excessive news depreciation of the index. If the first support lost is recovered the second zone would be 12,760. If this price does not hold there could be the possibility of seeing the lows of 11,294 points.
Conclusions and outlook
The continued decline of the IBEX 35 underscores the interconnectedness of markets in a global context marked by trade tensions. The impact of the tariff “whiplash” remains profound, and as developments in the negotiations and possible international countermeasures are awaited, investors are preparing to face weeks of high volatility. The prospect of a prolonged economic slowdown remains, forcing the Spanish market to adopt an increasingly cautious stance.
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Initial impact on the IBEX 35
Last Friday, the Spanish stock market suffered a historic fall, with the IBEX 35 losing almost 6% to around 12,400 points. This plunge, the worst recorded since the beginning of the covid crisis, wiped out tens of billions of euros of market capitalization, highlighting the strong impact of trade policies on the Spanish market.
Impact on the banking sector
The banking sector, a fundamental pillar of the IBEX 35, has been particularly hard hit. Entities such as Sabadell, Santander, BBVA, CaixaBank, Unicaja and Bankinter have suffered double-digit losses. Rising costs and pressure on profit margins have caused this sector to be severely impacted, reflecting the market's sensitivity to global instability.
Persistence of the downtrend
Although Friday's plunge had already set a negative precedent, the downward trend continued on Monday. Investors continue to reduce positions in risky assets, confirming the persistence of uncertainty. The lack of progress in international negotiations and the possibility of new countermeasures reinforced the pessimism in the market, keeping the IBEX 35 down at the opening of the session.
Reaction in other markets and safe-haven assets
The uncertainty generated by the tariffs has affected other financial indicators. Sovereign bonds are showing declining yields, which is evidence of the search for safer assets. Surprisingly, even gold-traditionally the safe haven of choice in times of high volatility-has lost ground, falling about 2.5% from its recent highs. Oil prices have also fallen, reflecting fears of a global recession and lower energy demand.
Technical Analysis IBEX35
The momentum started on January 27th was stopped in March with two double tops. The second one lateralized the index and after the news caused by the tariff wave, on Friday April 4 a death cross was managed that has led the index the same day in a purely bearish session. The closing of the session took place in a context of a 4-hour candle with a lot of wick, bringing the chart closer to 1-hour candles, the last hour of the session a bearish gap was managed that left the price at the lows of the whole year at 11,930 points. The 12.00 zone seems to have acted as a temporary brake. The RSI in Friday's session moved into very high oversold territory, reaching 14.53%. The Spanish premarket hours indicate that the index could be trading around 11,963 points. The POC (Point of Control) zone of the previous weeks is located at 13,277 points. If the index holds its price at the current supports we could see a recovery in the direction of the support lost on Friday at 12,518 points in the current week due to the excessive news depreciation of the index. If the first support lost is recovered the second zone would be 12,760. If this price does not hold there could be the possibility of seeing the lows of 11,294 points.
Conclusions and outlook
The continued decline of the IBEX 35 underscores the interconnectedness of markets in a global context marked by trade tensions. The impact of the tariff “whiplash” remains profound, and as developments in the negotiations and possible international countermeasures are awaited, investors are preparing to face weeks of high volatility. The prospect of a prolonged economic slowdown remains, forcing the Spanish market to adopt an increasingly cautious stance.
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.