Ibex 35 exits 2022 alive, despite losing 5.5%, and faces another uncertain year

The last stretch of the year in global equity markets has been weighed down by the resurgence of health and economic concerns that are coming, once again, from China. In Spain, the main stock index, Ibex 35, closed its last session with a decrease of 1.07%, which did not allow it to maintain the psychological level at 8300 points that it has been fighting for for weeks. In 2022 as a whole, its decline was 5.56%, which is a decline greater than that recorded in 2012, in the midst of the sovereign euro crisis, when it lost 4.66%. Analysts consulted coincided with referring to tourism values ​​as one of the main reasons that prompted the stock market to decline in recent days, due to fear of new infections with the Corona virus from the Asian giant.

Thus, the Spanish stock market closes a negative year, riddled with uncertainty, despite a better performance than the rest of European markets as a whole. the caribou It managed to halve the losses of nearly 10% prevailing in the major Eurozone indices. The bullish run of the banks and the flattening of many energy-related companies calmed downward pressures from abroad.

Thus, the banking sector, which also witnessed a positive 2021, managed to shine in the annual balance sheet: Caixabank stamped the biggest rise with an advance of almost 60%, followed by Banco Sabadell (58%) and Bankinter (45%) . Also among the most bullish are Repsol (50%) or Logista, the latest addition to the eclectic, with a final lead of 45%.

The fact is that the last day of the year, away from work to make up the balance of the year, increased the fall of the Ibex, despite a larger than expected brake today in the CPI for Spain, down to 5.8%. International investors have been keenly watching the impact that the current wave of Covid infections could have in China, as they boosted their expectations of a further contraction in economic activity in China in December.

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So The Ibex 35 says goodbye to 2022, the year that went from more to less after Russian invasion of Ukraine and that it made possible to cut even greater losses in the final phase thanks to the fact that inflation had given a certain respite to the pockets of the Spaniards and that the central banks had somewhat softened their rhetoric about the magnitude of the interest rate hike.

The balance may be worse if the buying momentum and optimism do not appear, especially in October and November. The Spanish selective minimum set in the year in mid-October, reaching 7,261.1 points, after the reduction of economic forecasts by the International Monetary Fund (IMF), and from that day until the end of the year, the recovery was 13.33%, driven by the rise in interest rates in the tenth month of year by the European Central Bank, after which it raised the money rate by 75 basis points, up to 2%. Then, in December, it raised it again to 2.5%.

Higher rates on the horizon

In any case, it should be noted that the effects of raising interest rates by central banks in response to the inflationary situation and the various uncertainties raised by the war generated chaos among the investors, who decided to transfer their money to other markets and investment branches. Until December, the capitalization of companies listed on the Spanish Stock Exchange declined by 2.52%, as the total value of shares of Spanish companies slightly exceeded one trillion euros, according to the 2022 Market Report issued by the Director of Spanish Stock Markets. BME.

The fall in which the difficulty of markets in attracting new inputs affected selectivity. As a result of this factor, the BME report cites data from the World Federation of Stock Exchanges, which indicates that nearly 100 of its members as a whole have written down the value of their listed companies by about $30 billion, from $124 trillion at the end. From 2021 to about 92 on October 31.

Entrances and exits

Ibex 35 has been a year full of great moves. In June, Acciona Energía and Sacyr entered the index, replacing pharmaceutical company Almirall and CIE Automotive, and in the last phase of the year Logista and Unicaja signed their debut on Ibex 35 after leaving PharmaMar and Siemens Gamesa. With the founding of Unicaja, there are now six financial entities included in the main Spanish stock market index. An exhibition of experts presenting this year’s lights and shadows. For eToro analyst Javier Molina, banks and insurers can shine in 2023 because Investment trend towards stocks with lower growthAs for (Technology companies experienced a severe puncture this year) and value (“value”) last year experienced an upward trend. In other words, shares in already incorporated companies that offer a very attractive dividend policy.

With the entry of Unicaja, Ibex now has six financial entities among the 35 companies that make up the selective

However, other experts believe that sectors such as banking will be affected by monetary policies and the rest of the uncertainties that remain. XTB analyst Dario Garcia believes that financial institutions will “watch closely to see how they control risk parameters such as late payments.”

It is not the only threat. Garcia also notes that both banks and companies in the energy sector could be hit by the tax on extraordinary profits from both sectors that the Sanchez government will begin to implement this year. However, like Molina, the XTB analyst believes the key is when investing stocks in 2023 It will be on the dividend yield offered by the companies, “although the main focus will be on the debt (bond) markets, gold and currency markets.”

Gold and real estate

Molina also believes that gold will once again be the champion as a refuge value, but points to the real estate sector as one of the other great opportunities for 2023, “not so much in the outright purchase of a home for later rent, but in the dividends provided by portfolio REITs” .

For this expert, the biggest “black swan” markets could face in 2023 would be a potential slump in inflation that would lead to further interest rate hikes. «It really happened in the seventies and Federal Reserve America wants to avoid him at all costs. So, inflation rose, rates rose, they fell, and then another sharp rise in inflation followed with a new hike in rates. It will be the biggest problem we may face.”

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