Spain leading index falls to new low - Gayo Lues

The Ibex-35 index fell by more than one percent at the start of trading on Monday to 5,990.7 points, the first time it dropped below 6,000 points since 2003.

Investors are concerned over the state of the Spanish banking sector as well as its debt-ridden economy, which is in recession with a 24 percent or so unemployment rate.

The recently nationalized Bankia, Spain’s fourth-largest bank has asked for an additional 19 billion euros in government help, in addition to the 4.5 billion euros rescue fund received from the state last month.

Led by Santander, the biggest eurozone bank by market value, all other Spanish stocks were also in the red. Santander was off by 1.13 percent at 4.271 Euros.

The current economic crisis in Spain has prompted Prime Minister Mariano Rajoy to implement reforms on the financial sector.

Rajoy, in power since December, has implemented more than 30 billion euros of austerity cuts as well as tax increases to reduce the country’s deficit and to avoid seeking a financial bailout like Greece, Ireland and Portugal.

Europe plunged into deep financial crisis in 2008, which has continued to intensify in recent months.

PG/JR/AZ