Ibex 35 falls for the third day in a row; Repsol and IAG: heads and tails in the face of tensions in the Middle East

The IBEX 35 index fell 0.27% to 11,642.30 at the opening on Wednesday. The largest decline occurred in shares of IAG (Iberia) – by 5.07%, and in Inmobiliaria Colonial – by 1.21%. Among the values ​​that avoided falling, Repsol rose 1.68%, helped by rising oil prices, while Indra rose 1.40%.

The Madrid pick comes on the back of two consecutive days of declines earlier this week, which moved it away from the yearly highs reached last Thursday.

Much of the blame for the fall lies with the punishment suffered by the banks, which will again be in the foreground today after BBVA yesterday afternoon adjusted the terms of the hostile takeover bid launched against Banco Sabadell, including payment in cash.

In particular, BBVA agreed to adjust the consideration for the takeover offer (OPA) of Banco Sabadell for the shareholders of this enterprise, taking into account the payment of dividends made on Tuesday by the bank of Catalan origin, as well as the shareholder remuneration that will be paid to the bank chaired by Carlos Torres on October 10, in order to maintain economic conditions of supply after dividends are paid by both companies.

From October 10 it will become one BBVA share and 0.29 euros in cash for every 5.0196 Sabadell shares.

In other news of the day, Cellnex’s board of directors has agreed to appoint Oscar Fanjul as non-executive president of the company, replacing Anne Bouvereau, who has been appointed special envoy for the World Artificial Intelligence Summit, which will be held in France in early 2025.

Fanjul has been an independent director of Cellnex since June 2023 and a member of the capital allocation committee, the National Securities Market Commission (CNMV) said.

In terms of analyst recommendations, it’s bad news for Repsol, which expects Barclays to cut its price target to €18 per share from €22 and Citigroup to cut its price target to €14.50, down from the previous €17. Despite these reductions, the potential for both estimates is high – 50% and 21.6%, respectively.

Backing Goldman Sachs Iberdrola, which the bank says has hit all-time highs. The firm raises its price target to 16 euros from the previous 15 euros. Growth potential is 15%.

On the other hand, RBC raises Solaria’s target price to 16.5 euros from 15.5 euros per share. The bullish potential is 41.26% using yesterday’s closing price as a reference.

On the macroeconomic agenda, investors had breakfast with unemployment data in Spain. On the one side, Unemployment rose by 3,164 in September after the end of the tourist seasonwhile, on the other hand, Social Security gained 8,805 affiliates.

The labor market will also star in the eurozone’s August unemployment rate, while the US will release ADP’s private payrolls report for September, which will serve as a prelude to the all-important jobs report on Friday.

Today, however, the macroeconomic divide is taking a backseat to global geopolitical instability following Iran’s attack on Israel last night. “It is the news coming out of the Middle East that will determine whether stock markets are able to turn higher or whether they will deepen their decline,” warns Juan J. Fernandez-Figares of Link Gestión..

“In principle, we believe that neither of the two countries is interested in a direct conflict, so it is very likely that the issue will end up as it did in April last year, without significant reaction from Israel – it is quite likely that it will be resolved “. A “surgical” and limited offensive, like in April, is a country that now has other open fronts in the region, so we do not believe that it is interested in opening another one,” the expert said. However, “we hope that Investors should remain cautious until they know the true extent of what happened yesterday.“

However, the rest of European stock markets opened positively, with the DAX index up 0.15% to above 19,224.35 points, the FT-100 index up just over three tenths to 8,303.13 points, the CAC 40 up just over by a quarter point. A percentage point above 7,594.83 points, the EURO STOXX 50 index is up just over two tenths, while the FTSE MIB is down 0.15%, above 33,716 points.

Wall Street futures point to a red open following yesterday’s declines, which saw the DOW JONES fall 0.41% and the S&P 500 shed 0.93% after hitting all-time highs the day before. The biggest punishment, however, was the Nasdaq, which fell 1.53% as tech stocks fell sharply. The VIX volatility index skyrocketed, rising 15% by the close of the session.

In Asian trading, with Chinese stock markets closed for another day due to a holiday, the Nikkei 225 index in Tokyo fell 2.22% to end at 37,793.

In commodity markets, oil prices continue to rise following gains recorded yesterday following Iran’s attack on Israel, amid concerns that the escalating conflict will eventually impact oil production in one of the world’s most abundant regions. Operators are also paying close attention to the OPEC report, which will be published today.

So far, benchmark Brent crude futures in Europe were up 1.60% at $74.72 a barrel, while U.S. West Texas crude futures were up 1.72% at $71.02.

The euro is currently down 0.04% against the dollar, leaving the exchange rate at $1.1065 for each currency.

In fixed income, Spanish 10-year yields will rise to 2.85%, bringing the risk premium to Germany to 79.40 points. On the other side of the Atlantic, the US 10-year yield is 3.744%.