Investor focus remains pinned on hopes for peace negotiations between the United States and Iran, which on Tuesday propelled the Spanish benchmark back above the 18,000-point threshold.
According to sources cited by Reuters, Tehran is weighing a U.S. peace proposal that would formally end the conflict but leave two of Washington's primary demands unresolved: the suspension of Iran's nuclear program and the reopening of the Strait of Hormuz.
The critical waterway has remained virtually paralyzed since the outbreak of war in late February, a disruption that has sent oil prices soaring and stoked inflationary fears.
This backdrop invites prudence; while recent headlines regarding a potential deal have exerted downward pressure on crude, Brent remains near 100 dollars per barrel—some 40% above pre-war levels. This underscores the challenge that elevated energy costs pose to the global economy and the persistent inflationary pressures they generate.
'Following yesterday's euphoria, it is logical to expect a more sideways session in equity markets today pending further news to confirm the status of negotiations,' Bankinter analysts noted in their morning brief. 'The market is pricing in a short-term peace deal between the U.S. and Iran, fueled by comments from Trump suggesting a high probability that the war ends before his trip to Beijing next week.'
The dizzying spike in crude prices dealt a heavy blow to financial markets in March, but the fragile ceasefire in the Middle East and the prospects of an agreement have fostered a rally in risk assets since April, further bolstered by robust tech earnings and the meteoric rise of the artificial intelligence sector.
Asian markets trended higher, supported in part by strong results from technology firms.
Investors are also looking ahead to the U.S. non-farm payrolls report. A Reuters poll of economists suggests the creation of 62,000 jobs in April, following a 178,000 increase in March.
Federal Reserve officials have warned that the war heightens the risk of a sustained inflationary crisis, given the persistence of high oil prices and mounting concerns over global supply chain disruptions.
Against this backdrop, at 0705 GMT on Thursday, the Spanish IBEX 35 was up 19.50 points, or 0.11%, at 18,123.80, while the pan-European FTSE Eurofirst 300 index edged up 0.07%.
In the banking sector, Santander rose 0.30%, BBVA added 0.32%, Caixabank advanced 0.50%, Sabadell gained 1.44%, Bankinter appreciated by 0.53%, and Unicaja Banco climbed 1.10%.
Among non-financial heavyweights, Telefónica retreated 0.26%, Inditex advanced 0.65%, Iberdrola shed 0.53%, Cellnex fell 0.46%, and oil major Repsol lost 0.73%.
(Reporting by Tomás Cobos; editing by Benjamín Mejías Valencia)
