The Ibex 35 lost 0.9% today after closing yesterday with a gain of 1.5%, thanks mainly to the banking sector. Today, the biggest cuts are for Siemens Gamesa, Solaria, and Fluidra, which all fall more than 2%. All of the Ibex, except Grifols, are trading in negative territory.
Yesterday, oil stabilized at multi-year highs after being boosted by concerns about energy supply and Monday’s decision by producer group OPEC+ to stick to a planned production increase rather than raise it further.
U.S. crude rose to its highest level since 2014, but today trims gains
and falls 0.15% to $78.81 a barrel. Brent crude lost 0.07% to $82.46 a barrel, after hitting a three-year high in the previous session.
“OPEC’s outlook suggests further declines in global oil stocks.
That’s a problem given that oil inventories are already low,” analysts
at CBA wrote in a note picked up by Reuters.
These concerns have also weighed on equity markets, worried that
higher energy prices could force central banks to raise rates faster than expected to react to rising inflation.
Today, New Zealand’s central bank raised interest rates by 25 basis points. Although the announcement was expected, the move pushed the New Zealand dollar about 0.1% higher, before falling 0.45%. The decision reinforced concerns that “inflation may trigger more rate hikes from different central banks in the future, as stagflation is one of the biggest concerns in the market,” Edison Pun, senior market analyst at Saxo Markets told Reuters.
Chinese markets remained closed for a public holiday, and Evergrande shares remain suspended from trading since last Monday pending an announcement of a major divestment.
Uncertainty over Evergrande’s fate rocked Chinese property developers’ bonds and Hong Kong-listed stocks and bonds on Tuesday after further credit rating downgrades.
Overnight, the Dow Jones Industrial Average rose 0.92%, the S&P 500 gained 1.05% and the Nasdaq Composite rose 1.25%, despite concerns that the U.S. will default on its debt.
The Senate will vote today on a Democratic-backed measure to suspend the U.S. debt ceiling, a key lawmaker said Tuesday, as partisan politics in Congress risks an economically crippling federal credit default.
Still, those fears helped push the dollar to 12-month highs and benchmark Treasury yields to near their highest level since mid-June.
The yield on the benchmark 10-year Treasury note rises today to 1.5466%, nearing a four-month high of 1.5670% reached in late September.