5 May - Spain's Ibex-35 stock index rebounded on Friday after four straight sessions in the red, albeit on track for a second weekly loss, as investors weigh the latest interest rate hikes against persistent inflation and fears of a banking crisis, awaiting a key U.S. jobs report.

The European Central Bank on Thursday slowed interest rate hikes in line with expectations with a quarter-percentage point increase to 3.25%, although in her speech afterwards the institution's president, Christine Lagarde, insisted on the likelihood of more hikes.

"The next interest rate movements will be data-dependent, although Lagarde recognizes that there is still work to be done (inflation too high for too long, with persistent risk focus on food), that is, they have not yet reached the rate ceiling, to which is added that there is no commitment to a specific time to initiate the decreases," reported Renta4.

Nevertheless, the markets see the ceiling for rate hikes as close to being reached.

After the Federal Reserve's openness to pause rate hikes, markets are waiting for more macroeconomic data. In this sense, during the day, the US job creation data will be published (12:30 GMT), an important indicator for inflation and the health of the economy, which will give clues about future Fed actions.

Although it is expected to show signs of slowdown, "if it is much stronger than expected, it could moderate expectations of Fed rate cuts, which are already close to -100 bps for 2H23," wrote Renta4 experts.

Beyond monetary policy, markets continue to worry about the outlook for the US banking system, which kept PacWest and Western Alliance shares in the red, fueling fears.

Thus, at 07:05 GMT on Friday, Spain's selective Ibex-35 stock market index was up 53.90 points, or 0.60%, to 9,097.50 points, while the FTSE Eurofirst 300 index of large European stocks was up 0.39%.

In the banking sector, Santander rose 0.69%, BBVA gained 0.87%, Sabadell gained 1.02%, Bankinter gained 1.71%, and Unicaja Banco rose 1.63%.

Caixabank advanced 1.64% after reporting a 21% increase in its March profits, thanks to higher income from loans.

Among the large non-financial stocks, Telefónica gained 0.47%, Inditex advanced 0.25%, Iberdrola gained 0.08%, Cellnex gained 0.89%, and the oil company Repsol rose 0.98%.

Outside the Ibex, Applus rose 8.6% after some investors reported interest in a possible acquisition of the Spanish industrial testing company, confirming a report published by Reuters on Thursday.

Applus was up nearly 14% on Thursday following the Reuters article.

(Information by José Muñoz; edited by Darío Fernández)