IBEX 35 Review: Road to Reaching the 11 000-Mark

After a rough, shaky year in 2016, economists have come into a consensus expectation that the stock markets around the world will take a leap this year. Although the Dow, FTSE 100, and the DAX are bigger markets compare to any, analysts have much confidence that Spain’s equity market will emerge as the strongest performer in 2017. In this IBEX 35 review, we will track how the Spanish index can reach an important milestone in the current year.

Rare Feat

The Spanish index is currently at above 10 800 level. Looking at it, it seems that getting into that 11 000-mark at the end of the year would be an easy accomplishment for the benchmark. Despite a soft decline last year, losing 2% at the end of 2016, it is poise to erase those losses and to cruise at a level not seen in years and what may be considered as a rare feat.

Diving into IBEX 35 review of last year’s performance, the index was at a constant low for the first two quarters. But from July to December, the benchmark staged a major comeback and jumped by 22.3%, to lift the index from 7 645 to 9352.

This is the main reason why analysts are confident that it may have a carbon copy of last year’s second half surge.  Now that political issues have been resolved, with Prime Minister Mariano Rajoy addressing Spain’s lack of government, the IBEX can take advantage of a stable bureaucracy.

Another factor in achieving such milestone is that IBEX is cheap in terms of valuation. This makes the index more appealing and more attractive to investors.

The rise in oil prices will also be instrumental. Oil shares recorded a 23% surge in the whole Europe. It has produced big impact to the weighting of indices. Sacyr shares, a blue chip oil company listed in the IBEX 35, posted a 32.6% climb in the previous year, helping the index to recover some grounds.

 

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