BÁRCENAS' SECRET PAPERS

Spanish corruption scandal hits financial markets

Blue-chip Ibex 35 losses 3.77 percent; risk premium jumps

The Spanish financial markets were badly hit on Monday by the fallout from the slush fund scandal surrounding Prime Minister Mariano Rajoy and his ruling Popular Party.

The outcome of elections in Italy at the end of February in which former Prime Minister Silvio Berlusconi will stand also caused jitters in the Italian markets with a knock-on effect across the rest of Europe.

The Spanish blue-chip Ibex 35 index shed 3.77 percent to 7,919.60 points, leaving it as the only European bourse to be in the red for this year. That was the benchmark index’s worst session since September.

The FTSE MIB in Milan shed 4.50 percent. In Frankfurt, the DAX declined 2.49 percent, while the CAC 40 in Paris was down 3.01 percent.

After the easing of tensions in the sovereign debt market of late, the spread between the benchmark 10-year government bond and the German equivalent widened notably, with the risk premium up 29 basis points at 382. Italy’s risk premium also rose sharply.

“Spanish yields have blown up in the past hour to their highest levels since December as concerns about the Spanish government mount,” said Ioan Smith, a strategist at Knight Capital Europe in London. “In addition to the growing corruption scandal in Spanish politics, the Italian elections towards the end of the month are also a concern.”

Rajoy on Monday reiterated denials of any impropriety on his part and his close colleagues within the PP, “except for some things” that have been published.

The corruption scandal in Spain has been picked up by the international press including the Financial Times and The Wall Street Journal, prompting investors to take a cautious approach.

“This bombshell could hardly have detonated at a worse time, with a population facing record unemployment and unprecedented austerity, and already infuriated by a string of corruption scandals,” the FT said in an editorial. The paper called for an independent inquiry into the allegations of corruption within the PP.

Y ADEMÁS...

Para poder comentar debes estar registrado en Eskup y haber iniciado sesión

Darse de alta ¿Por qué darse de alta?

Otras noticias

Avatar
Periodista de EL PAÍS
Avatar
Journalist at El País English Edition

LATIN AMERICA

The race to save Mexico’s endangered languages

The country’s wealth of 68 indigenous tongues is almost unmatched anywhere else, yet many are at risk of extinction

Venezuelan cartoonist fired for criticizing Chávez

Rayma Suprani’s dismissal revives rumors about new owners of ‘El Universal’

Mexico opens Chicontepec oilfields to foreign firms

Home to 40% of the nation’s reserves, the region holds much promise but also poses huge technical difficulties

Mexico’s most elusive mogul

Juan Diego Quesada México DF

Controversy regarding various accidents at his mines surrounds businessman Germán Larrea

Lo más visto en...

» Top 50

Webs de PRISA

cerrar ventana