Spain’s Ibex 35 falls 1.45% to a three-month low
Key Facts
Madrid’s Ibex 35 closed down 1.45% on Wednesday, October 28, marking its lowest closing level in three months, according to Investing.com data. The decline came as Brazilian stocks extended a correction that began after the election, with investors focused on the next government’s fiscal path. Reuters quoted traders as saying the October 28 session was the third leg of an adjustment that began on Monday, and that fiscal concerns were the main driver of investor sentiment. An initial report by EFE linked pressure on the index to Santander and Telefónica shares following Lula’s victory, and also listed Mapfre among the decliners. But the stocks diverged at the October 28 close: Santander fell 5.59% to 10.64 euros, while Telefónica rose 0.49% to 3.27 euros, according to Investing.com data.
In Brazil, Finance Minister Dario Durigan said on October 27 that market turbulence reflected positions investors had built over the previous days, not a deterioration in economic fundamentals. He said: "Yesterday’s reaction was more related to the positions the market had taken in recent days... It was not a reaction to fundamentals." Durigan reaffirmed the government’s commitment to fiscal responsibility as investors await the incoming administration’s direction after the election. Their questions focus on the government’s ability to set a credible fiscal adjustment path while maintaining social spending and investment. They are also watching the selection of key economic officials, Reuters reported, citing investor priorities.
In the United States, Alphabet’s results again tested technology companies’ ability to justify heavy AI spending, after revenue growth failed to prevent investors from being disappointed. The company’s third-quarter revenue rose 25% to 127.6 billion dollars, and earnings per share came to 2.12 dollars, according to its filing with the U.S. Securities and Exchange Commission. Even so, the Associated Press said the results fell short of Wall Street expectations despite strong revenue growth. Alphabet shares fell more than 10% in after-hours trading on Wednesday, to 289.95 dollars. In a report published by the agency on the morning of October 29, the decline raised questions about the company’s ability to generate sales that justify its huge AI investments; the Nasdaq Composite, however, rose 0.3% that day.
Attention in Europe is turning to the European Central Bank, which scheduled the release of its monetary policy decisions for Thursday, October 29, at 14:15 Central European Time, with the press conference due to begin at 14:45. The decision and press conference are scheduled for the same day that markets are tracking corporate results and moves in European stocks. The press conference will be the next event after the decision announcement, according to the ECB’s official schedule. In Brazil, the selection of economic officials and the path of fiscal adjustment remain among the issues investors are watching after the election. These developments remain at the forefront of market attention as the scheduled ECB decision and press conference approach.