Spain’s Stock Market Has Already Seen Much Greater Falls Than Those Of This March (-22.9%)

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Pablo Fernández (IESE) | The drop in the Spanish Stock Market in March (up to Friday 27) was 22.9%. It is a significant fall, but there have been (so far) greater ones. Looking at the stock market performance over the last 80 years, it can be verified that the Spanish bourse has already had much bigger declines than those of March 2020.

Below you can see the performance of the ITBM Index (Total Index of the Madrid Stock Exchange) from 1940 to 27 March 2020. This index is used because the IBEX 35 has only 31 years of history. It shows that the evolution of the ITBM and the IBEX 35 with dividends is practically the same.

Table 1 shows that the March 2020 stock market decline is the second largest in monthly and quarterly terms. But there have been several semesters with greater declines than the one ending March 27, 2020.
The last decline in the Ibex 35 began on February 17 and fell more than 10% up until February 28. Subsequently, it rose slightly on March 2, 3 and 4.

Figure 1 shows that the largest decline occurred between March 4 and March 16 (by 30%). The day with the biggest drop was March 12 (14%). Some analysts use this data to claim that investors were several weeks ahead of the Spanish government. What do you think?