IBEX 35: Predictions for the stock market next week and analysis of the bullish streak in 2025

The Unstoppable Rally of IBEX 35 in Recent Weeks

The Spanish benchmark has experienced spectacular performance over the past month. From mid-November to the end of the year, IBEX 35 achieved what once seemed impossible: breaking the historic 17,000-point barrier. This milestone reflects not only a technical rebound but a profound shift in market perception regarding Spanish economic prospects.

Closing near 16,850 points after approaching highs of 17,000 demonstrates a solid floor of buyers. Most sectors participate in the upward movement, adding strength to this rally. Financial and cyclical stocks have led the gains, with CaixaBank, BBVA, and Banco Santander providing the fundamental momentum.

Stock Market Forecast Next Week: Consolidation or Continuity?

Looking ahead, the most likely scenario is a sideways movement in the short term. Between December 15 and January 15, IBEX 35 is expected to fluctuate within defined ranges without a dominant direction unless significant macroeconomic surprises occur.

Key Technical Zones for Forecasts:

• Upper resistance: 17,000 to 17,200 points (psychological threshold already broken)
• Immediate support: 16,600 to 16,700 points
• Bullish target: 17,300 points (if optimism persists)

Although forecasts for next week suggest stability, investors should remain vigilant at these levels. A break below 16,600 would be a sign of weakening.

Factors Supporting Current Strength

Spanish banking continues to be the main engine. Better-than-expected profits from Santander, BBVA, and CaixaBank have reinforced confidence. Additionally, their share buyback programs and dividend increases have attracted persistent foreign capital.

The industrial sector has also contributed dynamism. Ferrovial and Sacyr lead the gains, reflecting optimism about economic recovery. The mention of Ferrovial’s entry into Nasdaq-100 acted as an additional catalyst, increasing the visibility of the Spanish market among global investors.

On the macroeconomic front, European data remain within expectations, and the European Central Bank adopts a cautious tone that accommodates risk decisions.

Historical Journey: From Distrust to Strength

September-October: The First Break of Skepticism

Just three months ago, IBEX 35 hovered around 15,400-15,700 points, operating in a moderately bullish trend after a dull September. The breach of BBVA’s takeover bid on Sabadell cleared uncertainty about integration. Banco Santander raised its interim dividend by 15%, demonstrating sector profitability.

Iberdrola announced an investment plan exceeding €100 billion with a horizon of 2031, focused on networks in the UK and the US. This boosted regulatory visibility and confidence in utilities.

August: Surpassing the 15,000 Milestone

In August, the index steadily climbed from 14,800 to 15,200-15,300 points. This advance coincided with expectations of rate cuts in the US and uninterrupted strength in the national financial sector.

Inditex, the IBEX’s flagship with 15.48% weighting, posted solid results that propelled bullish sessions. Overall performance was so excellent that IBEX 35 became one of Europe’s most profitable indices in 2025, with gains close to 37%.

July: Consolidation of New Highs

In July, the index operated above 14,800 points, steadily climbing. Expectations of economic reactivation and exceptional corporate earnings kept bullish sentiment. Calm in trade tensions favored risk-taking.

June: Volatility Amid Uncertainty

The first half of June saw volatility. After the ECB cut rates to 2% on June 5, sentiment improved. However, weak sales from Inditex published on June 11 caused a 4.6% drop in its shares, dragging 40 points in the overall index.

Israeli attacks on Iranian facilities on June 13 pushed oil prices higher and triggered a defensive shift. IBEX hit a low of 13,780 before closing at 13,910. Spanish harmonized inflation fell to 1.9%, reinforcing expectations of further rate cuts.

Composition of IBEX 35: The Pillars of the Index

Leading Companies and Their Weight

IBEX 35 comprises 35 highly liquid companies on the Spanish market. The top five by weight are:

1. Inditex (15.48%) - Global leader in fashion retail
2. Iberdrola (13.83%) - Power generator focused on renewables
3. Banco Santander (12.13%) - Global financial institution
4. BBVA (9.36%) - International banking group
5. CaixaBank (5.15%) - Spanish financial entity

Amadeus IT Group (5.08%), Ferrovial (4.75%), Telefónica (4.10%), Aena (3.98%), and Cellnex (3.86%) complete the top 10.

Sector Diversification

The index covers multiple sectors of the Spanish economy:

Financial Services: Santander, BBVA, CaixaBank lead the most weighted sector.

Oil and Energy: Iberdrola, Repsol, Endesa, Enagas provide exposure to the energy sector.

Technology and Telecommunications: Telefónica and Cellnex Telecom participate in digital infrastructure.

Consumer Goods: Inditex, Grifols, Rovi offer exposure to defensive and consumer sectors.

Services: Aena, IAG, Meliá cover air transport and hospitality.

Materials and Industry: Ferrovial, ACS provide access to construction and industrial sectors.

Index Mechanics

IBEX 35 is calculated in real-time between 09:00 and 17:30 (local time). The methodology adjusts for free float, considering only publicly tradable shares in the market capitalization calculation.

The composition is reviewed semiannually by the Technical Advisory Committee, which can add or remove companies based on liquidity and capitalization. This mechanism ensures it always represents the 35 most active companies on the Spanish exchange.

Long-Term Outlook: 2025-2030

Macro Factors

The Bank of Spain has improved its forecasts, expecting GDP growth of 1.9% in 2025. Tourism, external sector, and labor market improvements will drive this performance. However, private consumption and business investment need recovery to sustain dynamism.

Monetary policy will be decisive. The Federal Reserve has begun rate cuts, with expectations of up to 100 basis points reduction before year-end. The European Central Bank may adopt a more moderate approach, limiting stimulus for certain European sectors.

Sector Opportunities and Challenges

Banking Sector - Margin Pressure: Interest margins, which reached historic highs in the current high-rate environment, will face compression as rates decline. CaixaBank, Sabadell, and Bankinter could see their profitability pressured. As rates fall, the banking sector will likely lose relative prominence in the index.

Energy Sector - Major Opportunity: Renewables emerge as the main opportunity. The explosion of data storage and AI demand will require massive increases in electricity consumption. It is estimated that data infrastructure will consume up to 3.2% of European electricity supply by 2030.

Solaria, Acciona Energía, and Endesa will benefit significantly. Although these companies faced setbacks in 2024, their involvement in clean energies gives them substantial potential for the coming years.

Global Risks

The probability of a US and global recession has increased to 45% for 2025 due to labor weakening and demand slowdown. This uncertainty could generate episodic volatility. IBEX 35, more sensitive to external shocks than other European indices, would not be exempt.

Gold, rising over 20% in 2024 and projected to reach $2,700 per ounce in 2025, reflects concerns about recessions or geopolitical tensions. Historically, this signals greater market instability.

Positive Drivers

EU stimulus measures, particularly the Draghi plan for massive investment in digitalization and decarbonization, provide a solid foundation. Sectors like renewables and technology will receive a significant boost. Robust public investment combined with private support should contribute to the resilience of the Spanish market.

Historical Returns of IBEX 35

Characteristic Volatility of IBEX 35

IBEX 35 is characterized by higher volatility than other European indices, due to high exposure to cyclical sectors like banking and energy. The typical annual range (8,879-11,385) reflects these oscillations, with significant highs and concerning lows over short periods.

During economic crises, it suffers sharp declines but also experiences rapid recoveries during expansion periods. This volatility presents both risks and opportunities for traders and investors.

Conclusion: Short-Term Opportunities

IBEX 35 has demonstrated the ability to surpass expectations in 2025. Next week’s stock market forecasts suggest consolidation around 16,850 points, with oscillations between 16,600 and 17,200.

For traders aiming to operate this movement, the identified technical levels offer defined entry and exit opportunities. The banking sector will remain a key catalyst in the short term, although the energy sector promises higher medium-term gains.

The combination of Spain’s relative economic strength, attractive dividends, and European reforms provides a solid base to continue monitoring this index as exposure to the peripheral European market.