The economic deterioration caused by the runaway rise in prices and the more than possible rise in interest rates by central banks are sinking spirits in the stock markets. The Ibex-35 is infected with pessimism and falls this Wednesday, as do the main European selectives.
In the first bars of the session it has registered a decline of 1.5%, but the losses have been widening as the day went by, reaching 2% and losing 7,300 points. The statements of the president of the European Central Bank (ECB), Christine Lagarde, at an event this Wednesday in Frankfurt have not helped to calm things down. Lagarde has made it clear that the cost of borrowing will continue to rise to stabilize prices. “We will do what we have to do, which is to continue raising interest rates in the next meetings”, she has commented.
After falling 0.84% yesterday, the Madrid selective fell from the psychological level of 7,400 points, with all values in red except for Siemens Gamesa. Arcelor, Grifols, IAG recorded losses of around 4% shortly before mid-session, while Meliá and Indra dropped 3%. Trend similar to that of the main European stock markets, with falls of more than 1.5% in Frankfurt, London and Milan. The volatility is maximum, so after the middle of the session the losses have moderated.
Apart from the tightening of monetary policy with higher interest rates, uncertainty is also triggered by geopolitical tensions with Russia and suspicions of its sabotage of gas supply through the Nordstream gas pipeline. The tensions are transferred to the debt market, with increases in yields that make financing for the states more expensive. In this sense, the return on US 10-year bonds has climbed above 4%, a level never seen since 2010.
