Road to 12,000: A Look at the Ibex 35’s Latest Trajectory
The Ibex 35 reached 10,991 points this Tuesday, brushing up against the psychological threshold of 11,000 after a 0.3% rise. The benchmark index of the Spanish stock market is now closer to fresh highs not seen since 2017, a year when it last closed near this level. Intraday moves did surpass those marks, but the closing level stayed just shy of them. Analysts already suggest that the Ibex could finish the year around the 12,000 mark, a goal that would mark a historic ascent built on the strength of bank stocks.
Bank shares carry about one third of the index’s weight, and every major lender has posted double-digit gains so far in 2024. BBVA stands out with gains approaching 32%. While Indra has led the gains for 2024, rising as much as 34% thanks to a defense sector rally across Europe in response to heightened geopolitical tensions, banks still drive the overall movement in the Ibex.
The market initially anticipated rate cuts in March, but Christine Lagarde signaled a strong stance at the latest European Central Bank meeting, pushing back the expected easing to June. That message appears to have preserved an elevated net interest income for banks, supporting robust first-quarter results. Manuel Pinto, an analyst at XTB, notes that this monetary backdrop continues to favor the sector. He also points out that the upside in the Ibex has benefited from a rally in Mapfre, which has gained about 19.5% this year. In addition, Inditex has helped the Ibex higher, representing roughly 15% of the index and rising about 16% in 2024. Inditex’s 2023 results surprised the market with their strength and solid earnings foundation, reinforcing its role as a pillar of the Spanish market.
After Indra and before the banking names, pharma group Rovi stands out as the second-best performer in 2024, up around 33%. Antonio Castelo, an analyst at iBroker, notes that Rovi has improved its results, with solid revenues supported by a strong contract manufacturing segment. He adds that while some talk concerns a partial asset sale, the company’s relatively modest weight in the Ibex keeps the climb in perspective. Manuel Pinto of XTB emphasizes that Rovi’s trajectory reflects growing demand in a healthcare and technology mix that appeals to long-term investors.
Beyond Indra, Rovi, and the banking sector, other prominent gainers this year include hotel group Meliá, energy giant Repsol, and telecom operator Telefónica. Meliá has benefited from strong booking trends, advancing roughly 24%. Repsol’s gains align with higher oil prices, rising about 18% in the year so far. Telefónica has climbed about 15% amid the involvement of the State in its equity. The State-owned Industrial Participation Company, SEPI, informed the CNMV this Tuesday of a package representing about 3% of Telefónica’s capital. The government’s spokesperson and minister has reiterated the objective of completing a 10% stake purchase as quickly as possible, without unsettling the company’s share price.
On the Path to 11,000 and Beyond
With the Ibex near the 11,000 mark, forecasts for a climb toward 12,000 have gained traction, though analysts remain cautious. Bankinter’s strategists suggested the index could touch 12,000 by year-end, yet resistances around 11,200 points imply a challenging ascent ahead. Antonio Castelo of iBroker notes that the Ibex already operates at strong levels, and reaching new highs will depend on both corporate results and geopolitical stability.
European and U.S. stock markets have started the year at record levels, while the Ibex 35 remains a step away from the previous peak of 15,945.7 points set in November 2007. The current consensus is that the 12,000-point milestone is ambitious. Still, the market recognizes Spain’s stock market as attractive to investors, with potential for continued gains in the near term if first-quarter results meet or exceed expectations and no major geopolitical shocks emerge, according to analysts from XTB.