Spreadex Market Update
Spanish election uncertainty and Brent slide battle nascent Santa rally
In a year full of election drama Spain managed to sneak theirs in just under the wire, Sunday’s vote seeing incumbent prime minister Mariano Rajoy’ People’s Party ostensibly still in power, but with a mere 123 seats lightyears away from a majority. That leaves Podemos and Ciudandanos, the two major destabilisers in this election, third and fourth respectively after securing 69 and 40 seats (the Socialists coming in second with 90), meaning whatever Frankenstein’s monster of a coalition arises out of these results will likely be dictated by the country’s two youngest parties.
It’s like the Greek election saga in a minor key, one that poses a host of new problems for a country that has spent the last few months gradually sinking to the bottom of the Eurozone’s unofficial performance chart. The political and economic issues that are likely to follow the weekend’s election initially tempered investors’ appetites on the continent, before the CAC managed to eke out a 20 point rise and the DAX surged by 100 points. The Spanish Ibex, however, plunged nearly 3%, as investors flee what is set to be a long and arduous few weeks of government-forming.
Whilst Spain weighed on the Eurozone, Brent Crude’s latest dip, the commodity just about keeping its head above $36 per barrel, initially kept the FTSE fairly flat after the bell, before the index rose around 30 points alongside its European cousins. It was helped by a largely green open from its oil and mining stocks, a near half a percent slip from Royal Dutch Shell the only notable red spot in the sector.
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