La Madrid Stock Exchange she confirms herself as queen ofEurope: since the beginning of the year theIBEX 35 It gained over 30%, surpassing 15.100 points and approaching the 2007 record (16.040,40 points), just before the global financial crisis. But there's no magic behind this surge: real economic growth, smart reforms, and a thriving banking sector.
Banco Santander, bbva, Caixabank, Banco Sabadell, Bankinter e Unicaja are leading the charge, with dizzying gains that have brought the sector index to +79,84% since the beginning of the year, more than double that of the main index. Solid balance sheets, record profits, above-average return on equity (ROE), and generous dividends continue to attract international investors.
Not just banks. Among the top stocks, the most notable Indra Systems, with an incredible +102,21% since the beginning of the year, driven by the growing demand for defense technology and digital systems.
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Indra Sistemas, the queen of Madrid: +102% since the beginning of 2025
Founded in 1993 in Madrid, Indra Sistemas is the leading champion of the Spanish defense, with the State owning 28% of it through the State Industrial Participation Company (Sepi). Specializing in radar, electronic warfare, and integrated defense systems, the company chaired by Ángel Escribano aims to become a leading European player in the land, air, and cyberspace sectors. In 2025, the company recorded a turnover of 5,2 billion euros, aiming to reach $10 billion by 2030, as part of its international expansion strategy. The company collaborates with international partners such as Thales, Lockheed Martin e Edge Group, and serves as the Spanish coordinator for strategic European projects such as the Future Combat Air System (FCAS). Indra had submitted a non-binding offer of approximately $1 billion for Iveco Defense Vehicles, a division of Exor, later acquired by Leonardo.
Recently, the Spanish multinational received an upgrade from Morgan Stanley, which raised the rating to Overweight and more than doubled the target price, from 21,50 to 47 euros. For the American bank, Indra is riding two winning waves: the global race for security and the defense, and the solidity of the business technologicalBetween 2024 and 2027, revenues could grow by 10% annually and profits by 13%, with half of 2026 defense revenues already secured by signed contracts.
Europe's Best-Ever Economy: The Secrets of Madrid's Miracle
Behind the stock market's surge there is asaving that is seriously running. Spain has outpaced many European partners in recent years, and forecasts indicate that Madrid will continue to lead growth. According to the International Monetary Fund, by 2025 it will be the only major eurozone country with a GDP above 2% (Madrid +2,5%), while France, Germany, and Italy are struggling between 0,1% and 0,7%. Goldman Sachs predicts that the momentum will continue: 1,9% in 2026 and 1,7% in 2027, compared to the European average of 1,2%.
The main engine is the concrete reforms: increase the minimum wage, reduce working hours without cuts, targeted public investment, and a dynamic internal market. Families and businesses are pushing consumption e investments, while the country's ability to transform European funds into tangible infrastructure strengthens its economic momentum.
The labor market is more stable, with long-term contracts, declining unemployment, and rising productivity. The city is focusing on services—tourism, culture, hospitality, logistics, and digital—resilient and expanding sectors, less exposed to shocks than industry. The picture is completed by lower taxes, streamlined bureaucracy, swift civil justice, and low energy costs, thanks to a mix of renewable and nuclear energy. Added to all this is a growing workforce, fueled in part by immigration from Latin America.
Superstar banks: Spanish risk in the spotlight
The six largest institutions posted €17,1 billion in profits in the first half of the year (+11,7% year-over-year), supported by solid margins and generous dividends, confirming banks as the true driving force of the Madrid financial center. Among the top gainers: Unicaja Bank marks +91,59% since the beginning of the year, Banco Santander e Sabadell Bank respectively 86,77% and 84,84%, while bbva, Bankinter e CaixaBank they move between +69% and +75%.
But the hottest match in the Madrid square is thetakeover bid di bbva su SabadellThe country's second-largest bank confirms it will not withdraw its takeover bid. from 15 billion euros, aiming to create a European champion capable of competing with Santander, BNP Paribas, and HSBC. The National Securities Market Commission (CNMV) has made the move official, and the updated prospectus is expected in early September.
The path, however, is full of obstacles. The government of MadridTo protect competition, jobs, and subsidiaries, the European Commission has imposed a three-year merger ban, extendable to five years. Brussels has opened infringement proceedings against Spain for what it calls excessive "special powers" (just like in the Italian case). Unicredit - Banco Bpm). Meanwhile, Sabadell did not sit back and watch, selling its British subsidiary TSB for 3,1 billion and promising record returns to shareholders. Chairman Josep Oliu urges shareholders to hold firm until 2027, while with a fragmented shareholder base (none holding more than 7%), the outcome remains a €15 billion mystery.
Worst headlines since the start of the year: few shadows in the sky over Madrid
On the other hand, the declines remain limited and do not undermine the positive picture. Inditex, fashion giant owner of Zara, has lost more than 14% since the beginning of the year after a first quarter with sales up just 1,5%, lower than expected, and a colder and rainier-than-expected spring. Inflation, tariffs, and digital competition from Shein and Temu are putting pressure on margins and consumers.
Laboratories R It has lost more than 9% since the beginning of the year after a 4,5% decline in the first half of the year, penalized by a 35% drop in its CDMO (third-party manufacturing) business, due to fewer mRNA orders and the temporary closure of the Madrid plant. The specialty pharmaceutical business, however, grew by 12,8% thanks to heparin drugs, pushing margins above expectations.
Puig Brands, the historic Spanish fashion and fragrance group founded in 1914 and owner of brands such as Carolina Herrera, Paco Rabanne and Nina Ricci, has fallen 12,3% since the beginning of the year. Losses are more limited for Cellnex Telecom (-3,05%), leading operator in telecommunications infrastructure, owned by the holding company Edizione of the Benetton family, and for redea (-1,67%), a partly state-owned company that manages the Spanish national electricity grid.
