Spain’s benchmark stock index, the IBEX 35, closed the session with modest losses as investors locked in profits after recent gains. Despite the pullback, the index managed to hold above the key 17,600-point level, supported by strong performances from banking heavyweights Sabadell and BBVA.
Market sentiment remained cautious throughout the session as traders reassessed risk exposure amid mixed signals from global markets and ongoing uncertainty surrounding interest rate expectations in Europe and the United States. Profit-taking was particularly visible in cyclical and industrial stocks, which had led recent rallies.
Banking Sector Provides Key Support
Shares of Banco Sabadell and BBVA emerged as the main pillars supporting the IBEX 35. Investors continued to favor banking stocks on expectations that higher-for-longer interest rates could sustain net interest margins, even as the outlook for monetary policy becomes more nuanced.
BBVA benefited from its international exposure, particularly in Mexico, while Sabadell gained ground on improving profitability and stronger capital ratios. The positive performance of these two lenders helped offset losses in other sectors and prevented a deeper market correction.
Profit-Taking After Strong Gains
The session’s decline was largely attributed to technical profit-taking rather than a shift in fundamentals. The IBEX 35 has been one of Europe’s top-performing indices in recent months, driven by resilient earnings, solid bank results, and renewed interest from international investors seeking exposure to Southern European equities.
Analysts note that holding above 17,600 points keeps the short-term bullish trend intact, with the level now seen as a key psychological and technical support zone.
Broader Market Context
Elsewhere in Europe, major stock indices traded mixed as investors digested fresh corporate results and awaited further guidance from central banks. Bond yields were relatively stable, offering little direction to equity markets.
Looking ahead, market participants will continue to monitor upcoming earnings releases, inflation data, and signals from the European Central Bank for clues on the future path of interest rates.
For now, the IBEX 35’s ability to withstand profit-taking and remain above critical support highlights the underlying strength of Spanish equities, with banks continuing to play a central role in the index’s performance.
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