IBEX 35

Analysis of the Spanish stock market index in Madrid

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As you undoubtedly already know Spain boasts several major stock markets. However here we will study the largest Spanish stock market, the Madrid stock market. It can be very beneficial to follow this stock exchange, or the shares quoted thereon, with the aim of speculating on its index or the related shares. Here therefore is some information you should know.

Elements to consider before investing in this asset

Analysis N°1

Firstly, the time when the major European stock markets open is of course the time when this Spanish stock market Index is at its most volatile.

Analysis N°2

In the same way, all major economical publications on the Spanish economy and markets will have an influence on the volatility of this asset.

Analysis N°3

Of course, it will also be necessary to keep an eye on the press conferences organised by the European Central Bank as well as on any change in the ECB's monetary policy and in particular the evolution of interest rates.

Analysis N°4

Finally, as with any stock market index, the future volatility of the IBEX 35 index can be assessed by observing the results of the major companies that make up the index.

Analysis of the Spanish stock market index in Madrid

Trade on the IBEX 35 now!

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Sell

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Summary of the Madrid Stock Market:

The Madrid stock exchange is one of the four major Spanish stock markets together with those of Barcelona, Bilbao and Valence. These four are included in the ‘Borsas y Mercados Espanoles’ (Spanish Stock markets and exchanges).

The share prices of the largest Spanish companies are quoted on the Madrid Stock Market including some that are highly popular throughout Europe.

The major Madrid Stock Market index:

As with the majority of major European Stock markets, the quote for the Madrid Stock Market is integrated in the calculation of a major stock market index. In this case it is the Ibex 35 index that is composed of the stock market capitalisations of the 35 highest quoted Spanish companies.

It is therefore easier to understand the importance of this Stock Exchange for online trading purposes.

General presentation of the IBEX 35 stock market:

The IBEX 35 is a stock market in the financial sector of Madrid that groups together 35 of the largest Spanish companies under one index name, in much the same way as the CAC40 groups together the 40 largest French companies.

By ‘large businesses’ we refer to those that boast the largest volume of transactions on the Madrid market.

The IBEX 35 was created in 1992 to reflect the general performance of the Spanish economy. For this it takes into account the individual performance of the major stock market capitalisations of the country. This includes major names in Spanish industry such as the BBVA companies or the Santander Group from the banking sector, Iberdrola from energy and Telefonica from telecommunications.

We can therefore say with certainty that the IBEX 35 stock index is a strong indicator of the financial health of Spanish businesses. Of course, the composition of this stock index is not fixed as it is revised every six months by a specific committee composed of experts. It is the ‘Bolsas y Mercados Espanoles’ group that is responsible for this bi-annual revision.

Some historical data about the Ibex 35 market

When it was first quoted, Ibex 35 was worth 3000 points. Since then, the company gained a strong appreciation, during the years 2000 and even managed to climb above the symbolic bar of 12 000 points.

Afterwards, this stock market index which is very popular among investors went through a period of crisis due to the explosion of the internet bubble, the telecommunications sector being strongly represented.

But very quickly, Ibex 35 recovered strength and reached its highest record by scoring 15000 points before finally coming down again to around 10 000 points, particularly because of the crisis in the real state sector that hit the United States in 2008 and which contributed to a fall of the different values represented by this index.

Details of the composition of the IBEX 35 Index on the Madrid stock market:

To go into further detail we will now provide you with information on the businesses that are included in the Spanish IBEX 35 stock market index. Here therefore is a list of all the companies quoted in this index on the Madrid stock market classified according to their weight in this index and their activity sectors:

Telefonica in the telecommunications sector.
Grupo Santander in the banking sector.
BBVA in the banking sector.
Iberdrola in the electricity and gas sector.
Repsol YPF in the petroleum industry sector.
Inditex in the textile industry sector.
Banco Popular in the banking sector.
Gas Natural in the electricity and gas sector.
Grupo ACS in the construction sector.
Union Fenosa in the electricity and gas sector.
Abertis in the highways and parking sector.
Acciona in the construction sector.
Gamesa in the renewable energy sector.
Banco Sabadell in the banking sector.
Red Electrica in the electricity and gas sector.
Caixa in the banking sector.
Ferrovial in the construction sector.
Grifols in the pharmaceuticals industry sector.
Enagas in the electricity and gas sector.
Iberdrola Renovables in the renewable energy sector.
Acerinox in the metallurgy sector.
FCC in the sector of construction.
Bankinter in the banking sector.
Mapfre in the insurance sector.
Indra in the IT and electronics defence sector.
Tecnicas Reunidas in the sector of heavy engineering.
Cintro in the sector of highways and parking.
Sacyr Vallehermoso in the construction sector.
BME in the stock market services sector.
Endesa in the sector of electricity and gas.
Obrascnon Huarte Lain in the construction sector.
Abengoa in the sector of engineering.
Iberia in the airlines sector.
Banesto in the banking sector.
Telecinco in the telecommunications sector.

Some supplementary useful information concerning the Madrid stock market index:

Firstly we note that the rate of the IBEX 35 Index has strongly progressed since its initial quotation in 1992, particularly when compared to other European stock market indices.

The opening hours of the Madrid stock market should also be noted if you wish to benefit from the advantageous volatility offered by this asset. This particular financial market is open from Monday to Friday from 9 a.m. through to 5.30 p.m.

Concerning the composition of the IBEX 35 Index that we have already detailed, it is of course liable to change as it is revised twice a year, in June and December. A company only features in this index if it meets certain precise criteria. The 35 companies that feature in this index are however generally those that achieve the highest volumes of transactions in the preceding six months.

It should also be remembered that the IBEX 35 Index is weighted by the stock market capitalisation. The companies with the largest stock market capital feature more strongly in this index than the lesser ones.

How to invest in the IBEX 35?

There are several ways to invest in the IBEX 35, each with its own advantages and disadvantages.

Investing directly in IBEX 35 shares: As with the FTSE 100 and FTSE MIB, it is possible to invest directly in the individual shares of companies that make up the IBEX 35 index. This can be done via an online broker or a bank. This method can provide targeted exposure to specific companies, however, it also carries risks as the performance of individual companies can vary considerably and result in significant losses for the investor.
Investing in IBEX 35 index funds: IBEX 35 index funds are funds that invest in all the companies that make up the index. They offer diversified exposure to the entire Spanish market, however, index funds can also be subject to significant market fluctuations.
Investing in CFDs on the IBEX 35: CFDs (Contracts for Difference) on the IBEX 35 allow you to speculate on the price movement of the index without having to buy the individual shares. CFDs also offer leverage, allowing the trader to minimise the amount of capital they need to invest. However, it is important to note that CFDs are complex financial instruments and carry high risks, such as capital loss. Investors should understand the risks associated with CFDs before they start trading.

Frequently Asked Questions

What does the IBEX 35 name mean?

The name given to the Spanish stock market index Ibex 35 means 'Index Bursatil Espanol' or in English, Spanish Stock Exchange Index. The number 35 represents the 35 Spanish companies represented there. Bear in mind that this index is the main stock market index of the Spanish Stock Exchange and that it's made up of the 35 most liquid stocks in the country traded on the general index of the Madrid Stock Exchange.

What has been the historical evolution of the price of the Ibex 35 index?

Since its first listing on January 14th 1992, the Ibex 35 stock market index has risen significantly, particularly in comparison with other European indices. Strong economic growth in Spain between 2000 and 2007 enabled the index to reach a record high on November 8th 2007 to nearly 15,945.70 points.

When does the annual review of the composition of the Ibex 35 index take place?

The composition of the Spanish Ibex 35 stock market index is revised twice, in June and December of each year. Companies must meet a number of strict requirements to be a part of it. During each of the reviews carried out, it is most often the 35 companies that showed the highest volume of transactions that are selected to be part of this stock market index.

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