Analysts believe that if Greece avoids default the Ibex might end the year near 12,000 points. If the country doesn’t, the current price (10,900) might suffer in the short term a further loss of at least 10%. Since 2012 lows, the Spanish index has risen in value by 80%.
The Spanish 10-year bond also still has uptrend, although somewhat limited due to some factors which are playing against it. The bond has fallen by 8.4% from its lows of March, a hard setback in barely a few months.
The sudden movement of the curves is not only due to the crisis in Greece, but to the improvement of the economic prospects: a higher growth and a normalisation of inflation.
The virulence of the fall came as a surprise to the majority of investment and pension fund managers but the truth is that by then many of them were already warning about a possible bubble in the bond markets.
The uncertainty in Greece makes it very difficult to be accurate with forecasts. Analysts believe that the time to invest is approaching: the Spanish stock market is now trading at very attractive prices from a fundamental analysis perspective, considering the activity improvement and the expected profit growth.