By Lisa Zeffertt •
Published: 24 Jul 2023 • 10:18
Share markets down in Asia too/Shutterstock Images
MADRID’S IBEX Index fell by 1.6 per cent after the results of the election provided no clear winner of the Spanish elections, with neither Partido Popular (PP) nor the Spanish Socialist Party (PSOE) winning an absolute majority.
The IBEX Index fell on Monday after losing all the gains achieved last week, standing at around 9,424 points. Other European markets dropped, Milan fell 0.66 per cent, Paris by 0.3; London by 0.27, and Frankfurt 0.23.
Investor tension and nerves surrounding the uncertain outcome of the elections are reflected in the drop in the index, with Madrid-listed utility companies that were hinging on a right-wing victory in Spain dropping. Endesa stocks fell by 3.7 per cent and Iberdrola by 1.4 per cent.
Banks were also betting on a PP win, and Sabadell bank took a hit, experiencing a drop of 3.74 per cent in stocks, followed by Caixabank, which fell by 2.97 per cent; followed closely by Unicaja, 2.73 per cent; with Bankinter coming in behind Unicaja with a drop of 2.72 per cent and BBVA losing 2.05 per cent.
On the other hand, Telefónica reflected positive growth of 0.51%, and Cellnex Telecom increased its stock value by 0.44%.
Spain makes up 10 per cent of the European Union’s population, with a total population of 47.3 million people, Spain is one of Europe’s most dynamic, fast-growing economies. The lower rate of inflation, 2 per cent below the ECB target, and the dropping unemployment rate may be derailed by political uncertainty.
Barclay’s analysts warned of the most-feared scenario that may arise from the election results in a report. They stated that “an inconclusive result and a repeat election could delay European Next Generation recovery disbursements and cause further volatility.” With neither party reaching the 176 seats for an absolute majority, everything is up in the air.
A PP government would benefit the banking industry, utilities and real estate, all sectors that were banking on a PP win, while a coalition with VOX could ensure a longer useful life for nuclear power stations, while a PSOE government would benefit the tourism industry, with Next Generation funds from Brussels providing an aid package of 3.4 billion to develop tourism infrastructure in the country.
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Lisa is British, born in Hong Kong and has lived in many countries including the UK, Hong Kong,
Cyprus, and Thailand, Spain has been her home for the past 10 years.
After graduating with a BA in English Literature and Art History, she has worked in different
sectors, most recently as a ghostwriter and translator for six years
Writing is one of her passions, as well as working in both Spanish (fluent) and English.
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