Spain's Ibex 35 benchmark index suffered a strong blow last Friday, 25th May, when PSOE and Cs announced a motion of no-confidence in prime minister Rajoy and the possibility of early elections. The news did great harm to the Spanish financial markets and its risk premium: in less than an hour, the Ibex lost 300 points and the risk premium shot above 100 points, reaching its highest level for months. The index ended up closing the week barely above 9800 points (it closed the previous week above 10,000).
This Monday, despite trading starting with a slight uptick, by 10am it had already started to trend down again, falling below 9,800 points at midday to hit 9,757.4 points at 12.15pm, with Spain's risk premium above 115 basic points. The news that the debate on the motion will be held this Thursday and Friday hasn't improved things.
The uncertainty in Spanish politics over the future of Rajoy's government remains a headache for the stock market. But not only that: there's also the effects of the political uncertainty in Italy, awaiting a new government, still has a risk premium.
The stocks falling the most
Among the most affected stocks, construction and engineering company Tecnicas Reunidas leads the fall dropping 3.54%, followed by the bank Bankinter at -2.33%. Next was another bank, Santander on -2.04%, new technologies multinational Siemens Gamesa on -2.02% and Cellnex Telecom on -1.56%.
On the other hand, those that have done best on the day are Meliá Hotels, which grew 1.71% and Amadeus IT Group (+1.22%). They were followed by Grifols (+0.64%), Enagas (+0.60%) and Mediaset España (+0.60%).