Spanish Stock Market Closes 2024 on a High Note Despite Global Uncertainty

As the year 2024 comes to a close, the Spanish stock market, particularly the IBEX 35 index, has achieved a remarkable performance, defying the backdrop of global uncertainties. Here’s a detailed look at the key highlights and performers of the year.

Impressive Growth of the IBEX 35

The IBEX 35, which tracks the 35 largest and most liquid Spanish stocks, has risen by approximately 15.24% over the course of 2024. This growth is a continuation of its strong performance in 2023, when it led the rise of EU stock markets with a 23% increase. The index has now recorded five consecutive semesters of growth since June 2022, marking a total revaluation of 44% and an annual cumulative rate of 17%[1].

Top Performers

Among the top performers in the IBEX 35, International Airlines Group (IAG) stood out, securing the highest gains of the year. Banco Sabadell also saw significant growth, taking the second spot in annual performance. These companies have been instrumental in driving the index’s positive performance despite global challenges[2].

Sector Performance

The banking sector, a significant component of the IBEX 35, showed mixed results. While Banco Santander and BBVA experienced modest gains, CaixaBank and Bankinter saw slight declines. In non-financial sectors, companies like Iberdrola and Repsol posted gains, reflecting the overall positive sentiment in the market[2].

Trading Volume and Turnover

The trading volume on the Spanish Stock Exchange saw a notable increase in 2024, with 294.218 billion euros in shares traded, a 6% increase from the previous year. This is the first annual increase in the amount traded since 2015. The trading volume was boosted by significant corporate operations, including the Puig IPO and the takeover bid by BBVA for Banco de Sabadell[1].

Global Context

Despite the strong performance of the Spanish stock market, global uncertainties loom large. The upcoming inauguration of Donald Trump, ongoing geopolitical tensions in the Middle East and Ukraine, and the prospect of reduced rate cuts in the United States have kept many investors cautious. However, the Spanish market has managed to maintain its upward momentum, buoyed by strong corporate performances and investor confidence in certain sectors[2].

Shareholder Remuneration and Market Health

Spanish listed companies have also seen a significant increase in shareholder remuneration, with a growth of 25% to 34.65 billion euros. The market's Price-to-Earnings (PER) ratio remains at 9.6 times, which is below its historical average, suggesting potential for further upward movement. Additionally, the low volatility levels in 2024, comparable to those in 2005 and 2019, have contributed to the stable and generally upward trend of the IBEX 35[1].

In conclusion, the Spanish stock market has closed 2024 on a strong note, with the IBEX 35 index demonstrating resilience and growth despite global uncertainties. As expats in Spain, understanding these trends can provide valuable insights into the economic health and investment opportunities within the country.