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Published on 01/02/2008

1 February 2008

MADRID – The Spanish stock market managed to close in positive territory on Thursday in the last session of what was its worst January on record.

After the respite given by the Federal Reserve’s latest rate cut on Wednesday investors got back to fretting about where that would be enough to stop the US economy from slipping into recession. The latest weekly jobless claims figures in the world’s largest economy showed a bigger-than-expected jump, while personal spending remained anaemic.

There were also economic worries on the domestic front as consumer prices in January jumped by the biggest amount in over a decade. At the same time, inflation reached record levels in the euro zone, justifying the ECB’s hawkish stance on monetary policy.

Iberdrola and Telefónica managed to save the day for the domestic bourse, which turned higher toward the end of the session in line with Wall Street. New York was buoyed by reassuring remarks by bond insurance giant MBIA.

The blue-chip Ibex 35 index closed up 0.09 percent at 13,229.00 points after moving within a range of 12,958-13,338 points. The Madrid general index added 0.19 percent to 1,435.24 points. Open-market deals in the continuous market amounted to EUR 5.3 billion.

In the rest of euro area, Frankfurt lost 0.34 percent, while Paris shed 0.08 percent. London outperformed, adding 0.73 percent.

Iberdrola closed up 6.49 percent on persistent speculation of a takeover bid for the electricity company. Property company Colonial added 5.59 percent as another suitor came knocking at its door.

Fashion retailer Inditex lost 3.10 percent, as rival H&M posted disappointing results.

[Copyright EL PAÍS / Adrián Soto 2008]

Subject: Spanish news