The Spanish stock market is delivering truly exceptional results in 2025. The country’s key index, the Ibex 35, has gained 41.2% over 11 months, leaving its American and European competitors far behind. For comparison, the US tech-heavy Nasdaq grew by 21%, while the pan-European Euro Stoxx 50 rose just 15%. Neither Asian nor South American exchanges have come close to matching this pace.
This rapid surge in the Spanish market is driven by two key factors. First, Spain’s economy is growing significantly faster than the eurozone average. Second—and this is the main driver—the banking sector, which has the heaviest weighting in the index, is experiencing a historic year. Bank stocks have soared by 96%, giving the Ibex 35 a massive edge.
It appears that both of these trends are likely to continue into 2026. For example, the Organisation for Economic Co-operation and Development (OECD) has once again raised its growth forecast for Spain to 2.9% in 2025 and 2.2% in 2026. CaixaBank offers similar projections, forecasting GDP growth of 2.1% next year, which would allow Spain to maintain its status as the eurozone’s growth engine.
Conditions are shaping up favorably for the banks. The cycle of interest rate cuts that brought rates down to 2% in the eurozone appears to have ended. This is good news for the financial sector, which has seen historic stock market gains even as rates were falling. Now, bank margins could benefit from the anticipated rate hikes that many analysts expect in 2026.
Despite a strong surge in 2025 that pushed the index to break its historic 2007 record, experts still see room for further growth. According to their estimates, the Ibex 35 could gain another 5% from current levels. This is an attractive figure, especially considering that treasury bill yields do not exceed 2%, and even the best deposits offer less than 3%.
However, before that, Ibex 35 faces the challenge of finishing the year in the second-best position in its history. With one month left until year-end, the distant 1993 record of 54.2% growth seems out of reach. The new goal is to surpass the 41.97% mark set in 1996. Notably, in recent weeks, the index already briefly reached this level before taking a short pause.
Achieving this goal will require support not only from banks but also from companies that lagged behind during the year but have significant theoretical growth potential. According to analysts, shares of five such companies—Cellnex, Grifols, Rovi, Puig, and Colonial—could increase by more than 30%.
Maintaining momentum among the year’s standout performers will also play a key role. Among them is the trio of Indra, Solaria, and Banco Santander, whose shares have more than doubled since the start of the year. Another bank, Unicaja, nearly doubled its value with a 98% increase, while BBVA, having put the Banco Sabadell acquisition behind it, is close behind with a 96% rise.
On the other hand, only six companies ended 2025 in the red. Among them is heavyweight Telefónica, whose shares took a hit following the announcement of its dividend being halved. A short-term rebound in the company’s stock is crucial for the Ibex to finish the year on a high note.
For reference, the Ibex 35 is the main stock index of the Madrid Stock Exchange, Spain’s largest. Launched in 1992, it comprises the 35 most liquid companies traded on the exchange. The index’s composition is reviewed twice a year. It includes giants from various sectors, including banking, energy, telecommunications, and retail. The performance of the Ibex 35 is considered a key barometer of the health of the Spanish economy.
