Jan 24 (Reuters) – Spain’s main stock index closed on Monday falling to a one-month low, in line with world stocks growing increasingly uneasy at the prospect of a Russian attack on Ukraine.
On Monday, NATO said it was preparing troops and reinforcing its presence in eastern Europe in response to Russia’s military buildup on Ukraine’s borders.
These moves add to a series of signs that the West is preparing for an aggressive move by Russia against Ukraine, although Moscow has denied any invasion plans.
Analysts note a reluctance on the part of investors to invest in equities again, as has rarely been seen in the post-2008 era, with exceptionally low interest rates and central bank-driven liquidity.
“Ukraine is really in the spotlight right now,” said Michael Hewson, chief market analyst at CMC Markets. “Over the last 12 years, the mindset of investors has been to buy low. This is the first time in the last 12 years that it seems to me that this is not the position to take.”
Meanwhile, the Fed’s two-day meeting starting Tuesday is expected to shed more light on the central bank’s tightening plans, including raising interest rates.
Anxious markets are taking for granted even a small chance that the Federal Reserve will raise interest rates this week, although the majority expectation is that there will be a first move to 0.25% in March and three more until 1.0% at the end of the year.
In this context, the selective Spanish stock market Ibex-35 closed with a drop of 276.90 points on Monday, 3.18%, to 8,417.80 points, levels to which it had not returned since December 22, 2021, while the FTSE Eurofirst 300 index of major European stocks lost 3.61%.
At the head of the index was Siemens Gamesa, which registered a rise of 1.78% in the session after the improvement of Deutsche Bank’s recommendation to “buy” given the prospects of a merger with its main shareholder, Siemens Energy.
In the banking sector, Santander lost 4.53%, BBVA fell 3.47%, Caixabank lost 3.03%, Sabadell fell 4.46%, and Bankinter dropped 2.63%.
Among the large non-financial values, Telefónica scored 0.46%, Inditex gave up 3.38%, Iberdrola dropped 1.72%, Cellnex fell 4.95% and the oil company Repsol lost 2.25% .
(Reporting by Flora Gomez; additional reporting by Tom Wilson and Pete Schroeder; edited by)