The Ibex 35 rises 1.12% after snap elections are called

The Ibex 35 closed the session on Monday, October 5, up 1.12% at 19,299.70 points, after Prime Minister Pedro Sánchez called a general election for November 29. During the session, the index reached 19,338 points and recorded a low of 19,013, according to Bloomberg Línea.

The rise came during a session shaped by several concurrent factors. Alongside the political announcement, markets followed the first round of voting in Brazil, business activity data in Spain, and the performance of other assets. Therefore, the benchmark's advance does not allow the conclusion that the election call was its sole cause.

Santander and Telefónica stood out among the gainers

Banco Santander rose 4.52% and Telefónica gained 3.38%. Merlin Properties (3.22%), Banco Sabadell (1.80%), and CaixaBank (1.54%) also advanced. On the downside, Solaria lost 3.68%, Ferrovial fell 2.95%, and Enagás dropped 2.40%.

The session coincided with a sharp rise in the Brazilian stock market, whose main index was up 8.17% by the close of European markets. XTB analyst Javier Cabrera said that the result of the first round in Brazil favored Spanish companies operating in that country and highlighted Santander's exposure there. Bloomberg Línea also mentioned Telefónica and Mapfre among the companies with a presence in the Brazilian market.

In Spain, the composite Purchasing Managers' Index (PMI) for business activity rose to 56.8 points in September, from 55.8 in August, its highest level since December 2024, according to S&P Global Market Intelligence data cited by Europa Press. This indicator provided another element of context for the session, but the sources do not make it possible to measure how much it influenced the market close.

The election call opens a period of political scrutiny

The announcement of an election ushers in a new period of uncertainty over the policies the next government may adopt. Martin Wolburg, senior economist at Generali Investments, said that the Spanish economy remains in a solid position and that he does not expect drastic changes in direction, although he pointed to challenges such as housing and high indebtedness.

Meanwhile, Bloomberg Economics analysts Antonio Barroso and Ana Andrade estimated that the short-term economic impact should be limited, based on the fact that previous periods of political instability did not significantly alter growth. That assessment is an expectation attributed to the analysts, not an outcome already established for this new electoral process.

In the banking sector, Citi considers that the election call, on its own, does not substantially change the earnings outlook. According to the analysis cited by Bloomberg Línea, factors that could matter for banks include sector consolidation, the applicable levy, the state's stake in CaixaBank, and domestic growth prospects. The future composition of the government and its regulatory decisions will therefore be issues to watch; their impact will depend on the policies ultimately approved.

Solaria, by contrast, led the declines. Bloomberg Línea linked the pressure on the company to doubts about the future of a decree on data centers that stipulates that these facilities cover at least 80% of their electricity consumption with new renewable generation. The election call adds uncertainty about whether that regulation will remain in force, but does not by itself determine how the matter will be resolved.

Other markets closed with mixed movements

The performance of the main European markets was mixed: the FTSE 100 advanced 0.34%, Germany's DAX 0.09%, Italy's FTSE MIB 0.66%, and the Euro Stoxx 50 0.06%; France's CAC 40 fell 0.80%.

In fixed income, the yield on Spain's ten-year bond stood at 4.123%, compared with 4.086% at Friday's close, and the risk premium was 64.23 basis points. The euro fell 0.39% to $1.1211. These figures describe the close of that session and do not, by themselves, establish a subsequent trend.