Ibex 35 Concludes 2024 with Strong Gains Amid Global Economic Shifts
The Ibex 35 has closed 2024 with an increase of 1,478 points, reaching 11,950 points in a year characterized by global economic resilience, the beginning of a monetary easing cycle by central banks amid controlled inflation, and Donald Trump's victory in the United States presidential elections. According to market data consulted by Europa Press, the main indicator of the Spanish market has successfully achieved its second consecutive year of gains—posting a 2,276-point increase in 2023, marking its best record since 2009. This sets an unprecedented event since the positive streaks of 2013 and 2014. Over the past two years, the Ibex has accumulated a total valuation of 4.09%, although it has not been able to maintain the highs reach on December 5, when it touched 12,118 points—a level not witnessed by the Spanish market since 2010.
As we delve into the detailed evolution of the stock market throughout 2024, the Ibex began the year without major fluctuations, with January and February barely deviating from the 2023 closing. It was in March, however, that the Spanish stock market gained significant momentum along with other global markets, rising by 1,073 points and breaking through the 11,000-point mark, largely driven by macroeconomic indicators showcasing the resilience of major global economies, especially supported by the strength of services and robust company earnings. In concert with this, the Bank of Spain raised its GDP growth forecast for 2024 to 3.1% in December, revising it to 2.5% for 2025. This is particularly notable given the recessionary scenario in Germany and the weakened growth anticipated for the eurozone, which is expected to barely reach 1%.
Returning to the IBEX, the index maintained its quotation around the 11,000 points mark throughout spring and part of summer. However, early August saw investors gripped by panic due to fears of a recession in the United States, leading to a subsequent ripple effect on global markets. The Spanish stock market experienced its worst session since March 2023 with a 2.34% drop in early August, which coincided with a positive monthly result of 3%. Meanwhile, major central banks began a monetary easing cycle following their indications that the battle against high inflation had been resolved—European inflation was closing the year near 2%, while the US dealt with higher inflation nearing 3%. By the end of 2024, the European Central Bank (ECB) had implemented four quarter-point interest rate cuts, bringing the reference rate down to 3%, while the Federal Reserve (Fed) of the United States enacted three rate reductions, resulting in a range of 4.25-4.5%.
With the start of the school year and the summer fears behind, the Ibex initiated an upward trend that allowed it to approach the 12,000 points mark. However, Donald Trump's win in the US elections in early November created a divergence between US stocks and their European counterparts. Trump's decisive victory, which granted him a majority in both legislative chambers, stirred expectations about the potential impacts of his policies—deregulation, tax cuts, and trade tariffs—leading to mixed outcomes. While Wall Street indices soared, with significant revaluations spreading across the market—including the tech sector becoming a central focus—European markets felt the pinch due to tariff fears.
Despite the prevailing bearish sentiment in November, the Spanish stock exchange gained momentum in December, briefly conquering the 12,000 points mark before finishing the year with a slight decline of 0.4%. Beyond the national market, upward trends were a common theme across European markets: London gained 5.7%, Milan 12.6%, and Frankfurt nearly 1.9%. Conversely, Paris suffered due to instability and deficit levels, posting a decline of 2%. Meanwhile, US indices demonstrated impressive results; the Dow Jones surged by 13%, the S&P 500 by 24%, while the tech-heavy Nasdaq rose by nearly 30%.
On the internal front, the analysis of the Ibex 35 indicates that banks, benefiting from elevated interest rates, reported record profits across quarters. This remarkable performance positioned them among the top Spanish stocks in 2024. Notably, the airline group IAG emerged as the star performer of 2024, soaring by 10.376%, supported by the tourism boom and a robust services sector. This resurgence allowed the company to pay its first dividend since 2019.
Banco Sabadell added 6.864% amidst a hostile takeover bid from BBVA, which concluded the year with a 1.49% gain. Other notable performers included Unicaja (4.315%), CaixaBank (4.053%), and Bankinter (3.182%), while Banco Santander's growth was limited to 1.586%. The leading presence of Inditex, Spain's largest company by market capitalization, who gained 2.59%, also bolstered the index, despite its peak seeing a rise of up to 4.3% before disappointing market expectations with its latest results.
On the downside, approximately a dozen Ibex 35 stocks concluded 2024 with negative results, primarily in the energy sector, adversely hit by monetary policy shifts and declining commodity prices. The industrial sectors faced challenges due to global manufacturing weakness, particularly stemming from China. Thus, the most significant losers for the Ibex 35 in 2024 included Solaria (-5.8%), Grifols (-4.08%), Acciona Energía (-3.66%), and Enagás (-2.28%). Despite its promising debut in the market last May, Puig (-2.72%) struggled to garner investor confidence, prompting its inclusion in the Ibex in July at the expense of Meliá.
In commodity markets, the Brent crude benchmark closed at levels similar to a year prior, around $74 per barrel, while the US WTI barrel also mirrored this at $70. The euro depreciated by 6% against the dollar, trading at $1.04, a trend attributed to different trajectories for the ECB and the Fed projected for 2025, with future cuts anticipated for the ECB. Long-term Spanish bonds finished at 3.05% interest, with the risk premium over the German bond at 69 points. Gold prices surged by 26% throughout the year, reaching $2,600 due to geopolitical instability and robust demand from central banks. Meanwhile, Bitcoin ended the year on a high note, more than doubling its value and attaining $108,000—an all-time high fueled by the approval of Bitcoin ETFs in the US and Trump’s electoral success.
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