The US-Iran memorandum reopening the Strait of Hormuz sends oil prices tumbling, pushes the Ibex 35 to a record above 19,000 and lifts European bourses.
Euphoria swept through international financial markets on Monday after the announcement of a framework agreement between the Trump administration and the Republic of Iran to end the war in the Middle East. The Spanish stock market opened as one of the day's standout performers. The Ibex 35 smashed through all resistance levels, coming within a whisker of a new all-time high, breaking through the 19,000-point barrier to reach 19,122 points. With this move, the benchmark index has now chalked up a gain of around 10% since the start of the year.
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The agreement between the United States and Iran brings to an end the military escalation that had kept the Middle East on edge and was threatening global macroeconomic stability.
The Strait of Hormuz reopens to global trade
The economic centrepiece of the bilateral deal is the immediate reopening of the Strait of Hormuz. This maritime corridor is one of the world's key logistical chokepoints, through which a fifth of the oil consumed worldwide is shipped, along with vast volumes of consumer and industrial goods.
Since the outbreak of the conflict, the blockade of this shipping lane had choked global supply chains and sent the price of crude soaring to unsustainable levels, fuelling fears of a new inflationary crisis.
The announcement that commercial maritime traffic will resume has triggered an automatic slide in the price of a barrel of Brent crude, which fell by more than 4% before the market opened, after having climbed sharply during the months of hostilities. Even so, its price remains above the level seen before the conflict began.
Ibex 35 under the microscope: who is leading the gains?
The easing of geopolitical tensions has restored risk appetite among investors on the Spanish benchmark, with banks and major companies such as Inditex among the main winners:
- Tourism and airlines: Stocks such as IAG (parent company of Iberia and Vueling, which has come close to a 5% rise), Meliá Hotels and Amadeus are posting sharp gains. The drop in fuel prices and the return of geopolitical stability are boosting expectations for the summer season.
- Banking sector: The big financial institutions (BBVA, up 3.14%, Banco Santander, gaining 3.48%, and Caixabank, up 1.18%) are powering the benchmark, buoyed by broad-based optimism and receding recession fears.
- Industrial, consumer, telecoms and energy companies: Lower energy and logistics costs are giving some breathing space to the margins of companies most exposed to commodities. Inditex is up 2.07%, Iberdrola 0.30% and Telefónica 0.68% at the opening bell.
Europe joins the market rally
The upbeat mood on the Madrid stock exchange is being mirrored across other trading floors on the Old Continent. The Dax in Frankfurt, the CAC 40 in Paris and the Euro Stoxx 50 opened with solid gains, celebrating the end of a risk that had threatened to slam the brakes on global economic growth in the second half of the year.
