Spain’s stock exchange up 1.7% as Prime Minister ousted

LONDON (ICIS)–Spain’s main bourse Ibex 35 was recovering on Friday from losses earlier in the week as Prime Minister Mariano Rajoy was ousted from office after losing a confidence vote in Parliament.

The Ibex 35 index was up 1.7% by 11:30 local time, while Spanish chemical and energy stocks were also trading up, with Ercros’ shares up 1.65% and energy major Repsol’s up 1.96%.  Natural Gas Fenosa’s stock was down slightly, losing 0.14% of its value.

Mariano Rajoy, from the conservative party Partido Popular (PP), has been under pressure since 24 May when Spain’s High Court ruled that dozens of party officials had benefited from illegal commissions in exchange for public contracts.

The High Court also ruled that PP had financed electoral campaigns with an illegal slush fund.

The leader of the largest opposition party, the socialists at PSOE, said soon after the ruling that he would try to oust Rajoy through a confidence vote in Parliament.

PSOE’s leader and incoming Prime Minister, Pedro Sanchez, said he intended to form a technical government in order to call an early election.

However, by Friday he had not disclosed a date for the potential general election.

With 180 votes, Sanchez achieved an overall majority in the 350-strong Parliament, paving the way for him to form a government over the weekend.

“Sanchez noted earlier that he plans to call elections ‘eventually’, but could in theory hold on to power until 2020 with the support of the other parties. So lots bubbling along while we await some clarifications in the coming days,” said equity analysts at Germany’s Deutsche Bank on Friday.

Players in the country’s chemical industry said to ICIS this week that the new government’s main priority should be calling an election, arguing that a prolongation of the political crisis may hit the economy, which has been recorded a strong recovery since 2014.

Pictured: Incoming Prime Minister Pedro Sanchez
Picture Source: PSOE