Following the failure of weekend negotiations, signs of a rapprochement between the two sides and falling oil prices restored risk appetite to European trading floors.
Sources consulted by Reuters indicated nL6N40W19D that Washington and Tehran have left the door open for further talks, while a U.S. official noted that progress is being made toward a pact. President Donald Trump stated that Iran wants to reach an agreement, although he ruled out any deal that would allow Tehran to possess nuclear weapons.
"Despite the fact that the weekend talks ended without an agreement, various sources suggest that both sides continue to engage in dialogue and we could see a new round of negotiations before the two-week ceasefire expires on April 22," brokerage Renta 4 said in its morning report.
"The main stumbling block revolves around control of the Strait of Hormuz and the Iranian nuclear program. Regarding the latter, it has emerged that during the weekend talks, the U.S. proposed a 20-year moratorium on uranium enrichment, which was rejected by Iran, as they were only willing to accept a 5-year term," Renta 4 added.
Nevertheless, the underlying backdrop remains complex. Rising energy costs are fueling inflation expectations and have led investors to price in potential rate hikes by major central banks—a significant shift from pre-conflict forecasts, when the market was betting on cuts or a prolonged pause.
On the corporate front, the U.S. investment banking earnings season continues Tuesday with figures from Citigroup, JP Morgan, and Wells Fargo, alongside Johnson & Johnson and BlackRock, following Goldman Sachs' results published Monday. Morgan Stanley and Bank of America will follow on Wednesday.
At 0702 GMT, the IBEX 35 was up 105.60 points (+0.59%) to 18,129.40, in line with the FTSE Eurofirst 300, which advanced 0.36%.
Banking stocks led the gains on the Spanish selective index: Santander rose 1.53%, Bankinter 0.86%, Unicaja Banco 0.72%, Sabadell 0.64%, BBVA 0.61%, and Caixabank 0.28%.
Among the large-cap non-financial stocks, Telefónica gained 0.26%, Inditex advanced 0.15%, and Cellnex rose 0.57%, while Iberdrola and Repsol each shed 0.60%.
ACS stood out, soaring 3% nL6N40X0CX after Morgan Stanley upgraded its recommendation on the stock.
(Reporting by Tomás Cobos; editing by María Bayarri Cárdenas)
