The asset manager Invesco expects the Ibex 35 to maintain its upward rally in the second half, supported by the banking and energy sectors, with interest rates at 2.25% and electrification as key drivers.
Invesco, the international asset manager, has released an optimistic forecast for the Spanish Stock Market in the second half of 2026. The firm points out that the Ibex 35 will continue to grow thanks to the strong performance of banks and energy companies, in a context of high interest rates and increased investment in electrification.
Banking and energy sectors, the engines of the Ibex
In a meeting with journalists, the head of active distribution in Iberia at Invesco, Fernando Fernández-Bravo, highlighted that “Spain is growing above the European average,” which favours market dynamics. According to the manager, the Next Generation funds are driving utilities towards electrification, a shift that encompasses everything from electric cars to data centres and decarbonisation.
Fernández-Bravo emphasised that Spanish electric companies are “very diversified,” a positive factor following the Strait of Hormuz crisis, which highlighted the need to diversify energy sources. Regarding banking, Invesco believes that “it is a good time” to invest in the sector, with interest rates at 2.25% in Europe and due to the international exposure of Spanish banks.
Betting on emerging markets and caution in AI
Invesco's strategy also includes a bet on emerging markets, such as South Korea and Taiwan, benefiting from the revaluation of semiconductors and exports for data centres. However, the manager remains underweight in these countries as it considers that exports “are not sustainable in the short term” and companies are “a bit expensive.”
In artificial intelligence, Invesco takes a cautious stance. “We are waiting to see how its application is monetised,” explained Fernández-Bravo, which is why they prefer to be “a bit more negative” on software and increase exposure to semiconductors, infrastructure for data centres, commodities like copper and rare earths, and energy.
Interest rate outlook and geopolitical risks
The senior director of ETFs for Iberia & Latam at Invesco, Macarena Velasco, stated that “the market is very strong” and that demand continues to drive corporate results. The manager expects a gradual reopening of the Strait of Hormuz in the third quarter and a normalisation by the end of the year, which would allow for interest rate cuts towards the end of 2026 or early 2027.
“We see no reasons for central banks to need to raise rates,” Velasco indicated, except in Japan. However, she warned that they would change their outlook if they observed “a peak in inflation.” In the event of an escalation of the conflict between the United States and Iran, Invesco predicts that oil could reach $150, negatively impacting European, emerging, and Japanese fixed and variable income.
Another risk is that artificial intelligence fails to monetise as expected, which would lead to a decline of the 'Seven Magnificent' in the stock market, a weakening of the dollar, and better performance of European, emerging, and Japanese equities compared to the US.
For investors, Invesco's outlook suggests that the Spanish Stock Market remains attractive, especially in the banking and energy sectors, but it is advisable to stay alert to geopolitical developments and the monetisation of AI. The manager recommends diversifying towards emerging markets and maintaining some caution in overvalued technologies.
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