Telefónica shares: fall 7.26% after Lula’s reelection in Brazil

Brazil hits Telefónica hard and Dia provides the day’s operating reference: Telefónica shares

The open gives a fairly clean clue: when a major listed company falls more than 7% and another more than 5% at the same time, it is worth separating noise from mechanics. In Telefónica shares, the re-election of Lula da Silva in Brazil, its second-largest market, is weighing on the stock, and Santander, also highly exposed to the country, is trading sharply lower. Among today’s corporate news, Dia provides the figure-based update, having told the CNMV that sales in Spain totaled 1.608 billion euros in the third quarter, up 11.3%.

Prices as of 09:15 (Madrid time) on October 26, 2026.

Telefónica: the market is making it pay for Brazil and the drop is striking

Telefónica is down to 3.1690 euros at 09:15 CET, 7.26% below Friday’s close. The market is punishing its exposure to Brazil after Lula da Silva’s victory in Sunday’s runoff: it is its second-largest market, with 5.195 billion euros in revenue in the first half. The company told the CNMV on October 14 that it will publish its January-to-September 2026 results on November 12, before the open.

What it means. For me, the first thing here is not to confuse price with value. The move reflects a country risk that the market had not priced in, and that distorts the reading of the open. The really important part will come on Thursday, November 12, when it reports results. That is when we will see whether the simplification of the business in Spain and financial discipline are supporting margins and cash flow. What limits any upbeat reading is the backdrop of still-demanding rates and financing costs that no longer give anything away. If the market keeps the pressure on after the initial reaction, this will stop being an electoral scare and become a valuation reset.

Santander: the opening drop puts all the focus on October 28

Santander is down to 10.92 euros at 09:15 CET, 5.13% lower, also dragged down by its exposure to Brazil. The latest relevant CNMV communication on the business was the notice on October 21 for the presentation of its first nine months of 2026 results, set for Wednesday, October 28. The bank also announced treasury share transactions on October 22 within its buyback programme.

What it means. The opening punishment forces us to look less at the headline and more at the calendar. Santander heads into results with the Fed meeting between October 27 and 28, with the statement due at 19:00 CET on Wednesday. That is not a minor detail for a global institution. If the market senses that rates will take longer to come down, net interest income holds up better, but the bar also rises for growth, cost of risk and capital. What would support the stock is a solid reading of margins and shareholder returns; what would curb it is a more cautious outlook on lending or asset quality.

Dia: 1.608 billion in sales in Spain and double-digit growth

Dia has today informed the CNMV of its third-quarter sales update. In Spain, it reached 1.6083 billion euros, with 11.3% year-on-year growth and comparable growth of 8.3%. The group lifted gross sales to 1.9867 billion euros, 11.4% higher at current exchange rates.

What it means. This is by far the clearest new corporate news of the morning. The mechanism is straightforward: strong comparable growth, more store openings and market-share gains. Dia says it opened 27 stores in the quarter and 85 in the first nine months, which brings it closer to its annual target. I focus on two things. First, the improvement is driven by volume, not just price; that is a better sign. Second, the company insists on financial discipline, a phrase that matters more today than it did three years ago. What will test the move is the ability to turn sales into cash and margins while the cost of money remains high.

Mapfre: slips ahead of the October 28 presentation

Mapfre is down to 4.2880 euros at 09:14 CET, 2.32% lower. The insurer told the CNMV that it will hold an investor and analyst presentation on its third-quarter 2026 business activity on October 28 at 11:30 CET. The documentation will be published before the meeting begins.

What it means. The market is jumping ahead, but it still does not have the quarter’s figures. In insurers, the combination of rates and claims development matters far more than is sometimes acknowledged. High rates help the investment portfolio; a worse underwriting trend does not. That is why I think it is more useful to wait for Wednesday’s detail. The data point that can change the tone is not today’s open, but the quality of the operating result when the pre-meeting documentation is published. If the market sees stability in Non-Life and a reasonable contribution from the financial business, the decline would have less room to run.

ACS: up on a difficult morning, and that deserves attention

ACS is up to 88.80 euros at 09:14 CET, 1.43% higher. There is no new CNMV announcement today to explain the move, but the relative strength stands out in a session with visible declines in several heavyweights of the IBEX 35.

What it means. When a stock gains ground while the index falls 0.80%, I usually take note. It proves nothing on its own, but it does show where money is going when the market becomes more selective. In construction and infrastructure, the filter now is twofold: visibility in the backlog and manageable financing. If rates stay high for longer, the market will reward execution more than the story. What would confirm this strength would be seeing it hold beyond the open rather than fading into a mere technical bounce.

My reading

Today I see two different layers. One is country risk, with Telefónica leading the declines because of its exposure to Brazil after Lula’s re-election. The other is more fundamental, and there Dia gives a better-than-expected sales reference, while Santander and Mapfre force us to look at the immediate calendar. There is no shortage of catalysts this week: bank results, the Fed meeting on October 27 and 28, and the ECB on October 29 at 14:15 CET. Cheap money is no longer acting as a safety net; the numbers have to stand on their own.

My bias remains the same: I prefer to distrust moves that only look clean on the surface. If Telefónica does not stabilize after the initial hit and Santander comes in weak on October 28, the market will be saying it expects more than dividends and buybacks. By contrast, if Dia turns this growth into a credible improvement in cash flow and margins, that would be something more serious than a good opening headline. The main risk is reading as a trend what may still just be the first reaction to the ballot box.

To go deeper

• My previous analysis: Qualys shares: from AI panic to all-time high
• Stock market investing guide — basic concepts for making better decisions

This article is general financial information and does not constitute an investment recommendation. Investing involves the risk of loss of invested capital.