The Ibex-35 stock index rose on Tuesday on the strength of the financial sector, extending Monday's advance, although the trend seemed fragile in a scenario of banking tension that has put the Spanish selective on a roller coaster of pronounced movements in the last eight days.

The rapid intervention of central banks to rescue entities in danger or to promise aid seemed to calm investors for the moment, who are awaiting with great interest the decisions to be taken this week by the Federal Reserve (Fed) and the Bank of England (BoE), after the rescue of Credit Suisse through the merger with its competitor UBS.

"While stocks continue a general recovery, tomorrow's Fed meeting means that, at best, sentiment remains fragile. The initial impact of Credit Suisse's demise has faded to some extent, but concerns about a regional U.S. banking crisis continue to haunt investors," said Sergio Avila, analyst at house IG.

According to CME's FedWatch tool, markets are pricing in a 25% chance that the Fed will leave rates untouched when it announces its policy decision on Wednesday, with a 75% chance of a 25 basis point rate hike.

On Thursday, it will be the BoE's turn, with analysts currently forecasting a 25 basis point increase in the benchmark interest rate to 4.25%.

Financial markets remain alert to the possible appearance of new falls in financial institutions, with special interest in the case of First Republic Bank, while in Europe the ECB president said that the stock market turbulence may help the ECB to curb demand.

On Tuesday, the focus on the macroeconomic front will be on the ZEW survey on investor confidence in the German economy, for which a drop from 28.1 to 17.1 is expected in the main index, with a rise from -45.1 to -44.3 in the current conditions indicator.

At 08:05 GMT on Tuesday, Spain's selective Ibex-35 stock market index was up 95.90 points, or 1.09%, at 8,929.00 points, while the FTSE Eurofirst 300 index of large European stocks was up 0.78%.

In the banking sector, Santander rose 2.84%, BBVA gained 2.42%, Caixabank advanced 2.24%, Sabadell gained 2.31%, Bankinter gained 1.82%, and Unicaja Banco rose 2.06%.

Among the large non-financial stocks, Telefónica gained 0.88%, Inditex advanced 0.56%, Iberdrola gained 0.50%, Cellnex fell 0.30%, and the oil company Repsol rose 1.13%.

Meliá fell by 4.7%.

(Information by Tomás Cobos; edited by Flora Gómez)