With a hand, Mario Draghi offered a gift to European banks on Thursday. But with the other he gave it where it hurts most. The ECB announced a new round of liquidity at a low price – it will be linked to the reference rates, now at 0% – which will be enjoyed by financial institutions. But on the other hand he punished them with even longer prospects of a world with super reduced interest rates, which means even more time with narrow margins of profitability. It was this bad news that weighed on the price of Spanish banks, which suffered a real bleeding on the stock market.
The one that suffered the most was Sabadell, which dropped 7.25%. But the falls were widespread in the sector: Bankia lost 5.33%; and CaixaBank, Santander, Bankinter and BBVA, around 3%.
Just the opposite occurred in electricity companies, a highly indebted sector that will therefore benefit from low interest rates for longer. Iberdrola rose 3.5%. And the price of Endesa, Naturgy, Enagás and Red Eléctrica also experienced increases of 3.2% to 2.6%. This mixture of effects caused the Ibex to suffer only a slight decrease of 0.5%.
Falls in Europe
The losses were spread across all the European Stock Exchanges. Milan closed with a decline of 0.74%, Frankfurt 0.6%, London 0.53% and Paris 0.39%.
The speech delivered by Draghi in Frankfurt also brought the euro to its lowest level since June 2017. The common European currency fell by 1.2%, to be exchanged at $ 1,1177. The dollar rose against the ten major currencies, except the yen, according to calculations by the Bloomberg agency. With levels of volatility in the low markets, the dollar shows again as one of the safe haven of investors.
Wall Street continued with losses on Thursday at mid-session and the Industrial Dow Jones, its main indicator, fell by 0.50% in reaction to the cut in economic growth forecasts of the European Central Bank (ECB), which rekindles the fear of a global slowdown.
In the US, the Dow Jones fell 0.5% in half session, while the selective S & P yielded 0.39%. The Nasdaq composite index, which groups the main technological groups, lost 0.46%. Almost all sectors operated in red, led by finance and commodities.