Possible end of Fed cycle and Chinese stimuli propel Ibex-35

Possible end of Fed cycle and Chinese stimuli propel Ibex-35

July 10 (Reuters) – Spain’s Ibex-35 stock index hit the 9,300 mark on Tuesday, following the pattern of other world markets, on hopes that the Federal Reserve will soon stop raising rates and that China will provide more aid to the economy. ,

Fed members signaled on Monday that a few more hikes were likely in the coming months, as the end of the rate-tightening cycle nears. The general consensus is that the Fed will raise rates this month to keep them between 5.25% and 5.50%.

For this, data on inflation in the United States will be crucial, which will be published on Wednesday and provide an X-ray on the development of consumer prices and the Fed’s battle.

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“(…) softening of the general rate is expected (3.0%e vs. 4.0% earlier), but underlying inflation is still at a higher level (5.0%e vs. 5.3% earlier)”, wrote experts at Renta4 Analysis .

Another indicator of the state of the economy will be the start of US earnings season, which will include some of the big banks in the S&P 500. According to IBES data from Refinitiv, analysts expect second-quarter earnings to decline 6.4% on a year-over-year basis.

Also weighing on sentiment is the prospect of China expanding more supportive monetary policies for an economy that is showing signs of slowing recovery following lower-than-expected price data. On Monday, Chinese regulators extended measures to boost liquidity in the real estate sector.

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“(Price data from China) will indicate the possible arrival of new fiscal and/or monetary stimulus in the Chinese economy,” he added to Renta4.

In this context, at 07:06 GMT on Tuesday, the Spanish stock market Ibex-35 rose 32.60 points, or 0.35%, to 9,285.50, while the FTSE Eurofirst 300 index of major European securities rose 0.35%.

In the banking sector, Santander rose by 0.46%, BBVA by 0.41%, CaixaBank by 0.68%, Sabadell by 0.69%, Bancinter by 0.80% and Unicaja Banco by 0.99%. increased.

In broad non-financial shares, Telefonica fell 0.30%, Inditex gained 0.32%, Iberdrola gained 0.31%, Selnex gained 0.39% and oil company Repsol shed 0.04%.

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