European equity markets closed with gains of 0.3-0.9% gains today.

The winner once again was Spain’s IBEX, which has been a darling this year. It’s up 44% YTD after adding nearly 1% today. It started the year strong, took a dip at Liberation Day to wipe out the gains and has been steadily rising since. It closed at a new record today.

This period of gains comes after a long period of dead money and negative returns from 2008-2024.

What’s driving it? Spain’s banks make up 30% of the index and have been strengthening this year on strong growth in Spain. Banks are typically an economically-levered investment and GDP should grow around 3% this year. Banco Santander is up 106% YTD. The index and economy have also benefited from strong tourism spending.