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European markets: a difficult start to the week

05/05/2020 - 14h30

The announcements that have multiplied over the past week have not been able to boost the stock markets at the beginning of the week. The latter is starting off difficult with European stock exchanges in the red. Here is the quick tour with examples and expectations.

Elements that can influence the price of this asset:

Analysis N°1

Firstly, the time when the major European stock markets open is of course the time when this Spanish stock market Index is at its most volatile.

Analysis N°2

In the same way, all major economical publications on the Spanish economy and markets will have an influence on the volatility of this asset.

Analysis N°3

We would of course also monitor press conferences organised by the European Central Bank as well as any changes in the monetary policy of the ECB, notably relating to any movements in the interest rate.   

Analysis N°4

Finally, and as with any stock market index, we can evaluate the future volatility of the IBEX 35 index rate by noting the financial results of the major companies of which it is composed.

A simple analysis of these fundamental indicators and a technical analysis of this index rate will undoubtedly enable you to take positions judiciously on this asset.

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Summary of the Madrid Stock Market:

The Madrid stock exchange is one of the four major Spanish stock markets together with those of Barcelona, Bilbao and Valence. These four are included in the ‘Borsas y Mercados Espanoles’ (Spanish Stock markets and exchanges). 

The share prices of the largest Spanish companies are quoted on the Madrid Stock Market including some that are highly popular throughout Europe.

 

The major Madrid Stock Market index:

As with the majority of major European Stock markets, the quote for the Madrid Stock Market is integrated in the calculation of a major stock market index. In this case it is the Ibex 35 index that is composed of the stock market capitalisations of the 35 highest quoted Spanish companies.

It is therefore easier to understand the importance of this Stock Exchange for online trading purposes.

 

General presentation of the IBEX 35 stock market:

The IBEX 35 is a stock market in the financial sector of Madrid that groups together 35 of the largest Spanish companies under one index name, in much the same way as the CAC40 groups together the 40 largest French companies.

By ‘large businesses’ we refer to those that boast the largest volume of transactions on the Madrid market.

The IBEX 35 was created in 1992 to reflect the general performance of the Spanish economy. For this it takes into account the individual performance of the major stock market capitalisations of the country.  This includes major names in Spanish industry such as the BBVA companies or the Santander Group from the banking sector, Iberdrola from energy and Telefonica from telecommunications.

We can therefore say with certainty that the IBEX 35 stock index is a strong indicator of the financial health of Spanish businesses. Of course, the composition of this stock index is not fixed as it is revised every six months by a specific committee composed of experts. It is the ‘Bolsas y Mercados Espanoles’ group that is responsible for this bi-annual revision.

 

Some historical data about the Ibex 35 market

When it was first quoted, Ibex 35 was worth 3000 points. Since then, the company gained a strong appreciation, during the years 2000 and even managed to climb above the symbolic bar of 12 000 points.

Afterwards, this stock market index which is very popular among investors went through a period of crisis due to the explosion of the internet bubble, the telecommunications sector being strongly represented.

But very quickly, Ibex 35 recovered strength and reached its highest record by scoring 15000 points before finally coming down again to around 10 000 points, particularly because of the crisis in the real state sector that hit the United States in 2008 and which contributed to a fall of the different values represented by this index.

 

Details of the composition of the IBEX 35 Index on the Madrid stock market:

To go into further detail we will now provide you with information on the businesses that are included in the Spanish IBEX 35 stock market index. Here therefore is a list of all the companies quoted in this index on the Madrid stock market classified according to their weight in this index and their activity sectors: 

 

Some supplementary useful information concerning the Madrid stock market index:

Firstly we note that the rate of the IBEX 35 Index has strongly progressed since its initial quotation in 1992, particularly when compared to other European stock market indices.

The opening hours of the Madrid stock market should also be noted if you wish to benefit from the advantageous volatility offered by this asset. This particular financial market is open from Monday to Friday from 9 a.m. through to 5.30 p.m.

Concerning the composition of the IBEX 35 Index that we have already detailed, it is of course liable to change as it is revised twice a year, in June and December. A company only features in this index if it meets certain precise criteria. The 35 companies that feature in this index are however generally those that achieve the highest volumes of transactions in the preceding six months. 

It should also be remembered that the IBEX 35 Index is weighted by the stock market capitalisation. The companies with the largest stock market capital feature more strongly in this index than the lesser ones.

 

Trading on the IBEX 35:

Given that this index takes into account the economic and financial health of Spain, all the macro-economic data coming from this country should be taken into account when implementing your trading strategies.

We also take into account all the declarations of the country’s leaders on the international field and particularly the European field, which often have a strong effect on announcements and wield a lot of influence on the rates.

Finally, a primordial element for any analysis of the IBEX 35 market concerns the bond interest rates which have been in the spotlight since the beginning of the debt crisis. The latter can serve as an index of confidence for the stock market investors and therefore have consequences for the IBEX 35.

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Trade on the IBEX 35 now!
76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.