The year so far has been good for traders and investors in Spanish shares.
From 8,776.2998 on 7 January, the benchmark index is currently trading at about 9,084.
With steady economic growth and a current-account surplus, the climate for equities seems benign.
A marked decline
But those whose memories stretch back to late 2017 may prefer to be cautious. Then, the Spanish market was tipped as a likely star performer in 2018.
One commentator declared that “the pain could be ending for Spanish stocks”. Another declared a “bullish bias” on Spain’s stock market.
It’s easy to be wise with hindsight, but the figures speak for themselves. A year ago, on 6 February 2018, the IBEX 35 stood at 9,810. It hit a 12-month high of 10,271.4004 on 11 May and began an erratic but marked decline to a low point of 8,363.9004.
For followers of chart patterns, it may be significant, and ominous, that the trough is much more recent than the peak.
However, the current trend is upwards, from a New Year opening level of 8550 on 2 January.
The IBEX 35 is the benchmark index of the venerable Bola de Madrid, the largest of Spain’s exchanges, founded in 1831. The index contains some of the best-known names in Spanish business and industry, including world-class banks Sabadell and Santander, the electrical utility and the infrastructure and services group .
The causes of the perhaps-disappointing 2018 performance include the continuing stand-off over Catalonia. In 2017, a referendum – which the national government declared illegal and tried to prohibit by force – voted for independence, and a declaration to that effect was made by Catalan leaders in October of that year.
Some leaders were promptly arrested by the Madrid authorities while others fled to other European countries.
The fund added: “The labour market has improved but significant challenges remain. While the unemployment rate fell to 14.6%, below its long-term average, Spain’s youth joblessness, the share of temporary contracts, and involuntary part-time employment remain among the highest in the European Union.”
Over the longer term, the IBEX 35 has taken something of a battering. Five years ago, on 7 February 2014, it stood at 10,072.9004, hitting a five-year peak of 11, 749.2998 on 10 April 2015. Its five-year trough was on 24 June 2016, at 7,787.7002.