Spain's main stock index partially recovered on Thursday from its biggest daily drop in a year and a half in the previous session, the day the European Central Bank decided to insist on its monetary roadmap despite growing concerns about the banking sector.

After plunging 4.37% on Wednesday, the Ibex-35 resumed gains after Credit Suisse received a $54 billion lifeline from the Swiss central bank, momentarily calming the troubled waters since last week in the financial sector following the collapse of two U.S. banks and the recent plunge in Swiss bank shares.

Despite the banking turmoil, the European Central Bank seemed not to catch the panic of the markets and on Thursday decided to raise interest rates again by 50 basis points, warning however that future decisions will depend on the evolution of macro data, despite its insistence on the strength of Eurozone banks.

"I was surprised by the fact of saying that monetary policy has no relation with the banking situation, it seemed to me that it is a way of trying to reassure the market, but I would say that of course, if there is a relationship," said in a note Sergio Avila Luengo, analyst of marked at IG.

"The problem is that the ECB is between a rock and a hard place, if they don't control inflation it becomes an unsustainable problem and if any bank breaks, they will solve it by injecting liquidity like the Fed and the Swiss National Bank have done."

In this regard, three sources told Reuters after Thursday's rate hike announcement that the ECB's latest decision was made only after news of the capital injection to Credit Suisse broke.

However, the IG analyst agreed with the ECB's view, adding that "the European banking sector is well capitalized and less risky than U.S. banks."

Following the ECB's decision, all eyes are now on next week, when the Federal Reserve will decide (March 22) whether to raise rates again or take a pause, until the choppy waters in the banking sector calm down.

As a result, the Spanish Ibex-35 closed Thursday's trading session with a rise of 131.10 points, or 1.69%, to 8,906.90 points.

Despite Thursday's rise, and with Friday's session still to come, the Ibex-35 accumulates a weekly loss of 4.25%, which, if maintained, would be its steepest one-week decline in six months.

The FTSE Eurofirst 300 index of large European stocks rose by 1.29%.

In the banking sector, Santander rose 2.60%, BBVA gained 3.41%, Caixabank gave up 1.32%, Sabadell fell 0.49%, Bankinter dropped 2.52%, and Unicaja Banco lost 1.76%.

Among the large non-financial stocks, Telefónica fell 0.83%, Inditex advanced 3.94%, Iberdrola gained 1.61%, Cellnex fell 0.23% and the oil company Repsol lost 0.63%.

(Information by Darío Fernández; edited by Jose Muñoz)