The Ibex 35 started its session this Tuesday with a setback and accumulated falls of 0.60% in the first stages of the session although it clings to 18,000 points, after investors’ punishment for Santander Bank. Earnings season Madrid Stock Exchange has started with punishments for several firms, among them, the securities in the eye of the hurricane of the investor punishment are those of Banco Santander, after it announced the acquisition of the American bank, Webster Bank, by 12.2 billion dollars (10,300 million euros), before announcing a record profit of 14,101 million euros.
Banking Sector Pressures Drag Ibex 35 Performance
Banco Santander’s dual announcement on Tuesday created ripples across global markets. While the Spanish banking giant reported record annual profits of €14.1 billion – a 15% year-over-year increase – its $12.2 billion acquisition of Connecticut-based Webster Financial Corp. triggered investor skepticism. Market analysts attribute the 6.36% drop in Santander’s NYSE-listed shares to concerns about acquisition premiums and integration challenges in the competitive U.S. regional banking market.
Earnings Season Volatility Hits Spanish Lenders
The banking sector dominated market movements as Spain’s fifth-largest lender, Unicaja Banco, joined Santander in experiencing share price declines despite positive financial results. Unicaja shares fell nearly 5% after reporting record annual profits of €350 million, highlighting market concerns about narrowing interest margins across the Eurozone banking industry. Attention now turns to BBVA’s upcoming earnings report this Thursday, with investors scrutinizing exposure to emerging markets and commercial real estate portfolios.
ECB Policy Decision Looms Over Markets
European markets remain cautious ahead of Thursday’s European Central Bank meeting in Frankfurt. Financial experts widely anticipate the Governing Council will maintain current benchmark rates at 4.5%, but investors seek clarity on the timeline for potential rate cuts. “The banking sector’s sensitivity to interest rate policy makes this ECB meeting particularly significant,” noted María Rodríguez, chief economist at Banco Bilbao Vizcaya Argentaria. “Market participants want confirmation that inflation control won’t come at the expense of credit market stability.”
Technical analysts observe that the Ibex 35’s ability to hold above the psychologically significant 18,000-point level suggests underlying market resilience. However, sector-specific risks in banking and energy continue to create headwinds for the Spanish benchmark index as Q4 earnings season progresses.
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Source: Diario de Ibiza
Images Credit: www.diariodeibiza.es