Madrid shares extend losses as Wall Street falls

Share prices extended their losses in late afternoon trade, dragged down by Wall Street, while Union Fenosa and Sogecable underperformed on debt and liquidity concerns, dealers said.

At 3.20 pm, the IBEX-35 index was down 87.2 points or 1.60% at 5,366.9, after trading in a range of 5,333-5,516, on turnover of €856m, with put-throughs accounting for about 15%.

The IBEX-NM fell 10.8 points to 1,300.4.

Wall Street's early slump did nothing to lift sentiment, already depressed by sharp declines on the German market.

Blue chips, particularly SCH and Repsol YPF tumbled, while Fenosa and Sogecable underperformed on concerns about their debt and liquidity position.

"Wall Street's headed south and we're following suit...The market's really nervous and everyone's focusing on companies' debt and liquidity situations...The main blue chips, particularly the banks, are being hard hit," a leading UK investment house saleswoman said.

"Our next support on the IBEX-35 index is 5,300...Let's see if we hold that today," she noted.

Fenosa was down 1.44 euro or 13.5% at 9.26, on heavy turnover of almost 6 million shares, as Texas Utilities' 25% drop yesterday highlighted concerns over the Spanish power company's debt and liquidity position.

Among other electricity utilities, Endesa was up 0.08 at 9.38, benefiting from switching from both Fenosa and Iberdrola, down 0.59 or 4.5% at 12.51.

REE lost 0.30 to 9.41, amid rising uncertainty over government policy towards the country's high voltage grid, which is 60% owned by the utility.

Repsol YPF shed 0.51 to 11.24 on falling crude oil prices.

Among banks, SCH was down 0.14 at 4.83, amid uncertainties about the bank's asset disposal plans, while BBVA was off 0.07 at 7.22. The Brazilian real's drop also weighed on both banks.

But domestically focused Popular was also on offer, falling 1.32 to 39.35.

Vallehermoso put on 0.04 to 8.03, extending recent gains over speculation the property group could become the target of a takeover bid at 10 euro per share, possibly by a constructor.

Telefonica fell 0.03 to 8.12, but off a high of 8.32, on turnover of 26.8 million shares, underpinned by positive comment from Merrill Lynch of the sector.

Amongst other TMTs, Sogecable fell 0.79 or 11.4% to 6.11, off a low of 5.87, on volume of about 546,000 shares, on concerns about the company's debt and liquidity position.

Extending recent gains, Gamesa added 0.60 or 3.48% to 17.85, on volume of about 878,000 shares, underpinned by yesterday's analyst briefing, which dealers described as upbeat.

Among small caps, Azkoyen surged 0.45 or 10.98% to 4.55, on heavy volume of 305,000 shares after reports that the government plans to relax future legislation on tobacco vending machines.