GDANSK/MILAN, Nov 30 (Reuters) -Spain's main benchmark equity index was rising on Thursday to its highest level since May 2018, following a nearly 23% rally so far this year that makes the index one of Europe's best performers.

The IBEX was up 0.36% in Madrid at 1042 GMT, virtually in line with gains in the STOXX Europe 600, while year-to-date, the European index is up 8.5%.

Pharmaceutical company Grifols and solar panel maker Solaria were the IBEX stocks that rose the most on Thursday, by more than 2% each.

November's rally has brought the IBEX back above pre-pandemic levels for the first time this week, after breaking through the 10,000-point barrier.

However, the index is still well below its all-time high of almost 16,000 points, set in November 2007.

"The big question is whether this 'rally' (bullish streak) in such a short space of time is sustainable. This is going to depend on whether or not the market expectations of rate cuts materialize so soon and, in my opinion, a bit premature," said Natalia Aguirre, an analyst at the Renta 4 securities house.

In late 2022, a wave of pessimism gripped the market as analysts saw a recession looming in both Europe and the United States, as rising interest rates were expected to hurt the labor market and weigh down the economy.

However, the sharp fall in inflation and the unexpected resilience of the economy restored optimism to traders, who - after taking refuge in safe-haven assets such as the dollar and gold - have regained their appetite for equities.

The main Spanish index has risen by almost 23% so far this year, with half of the gains accumulated in November, as hopes of a monetary policy more in favor of monetary stimulus were consolidated.

The IBEX outperformed other major European indices in November, with a rise of 12%, due to the high weighting of banks, whose margins benefited from the rate hike.

The STOXX, on the other hand, rose by 6.3%.

Along with the pharmaceutical company Rovi, the banking institutions BBVA and Sabadell are the ones that have risen the most so far this year, while Cellnex, Grifols and Solaria have been the ones that have risen the most in November.

(Reporting by Danilo Masoni; edited by Amanda Cooper; edited in Spanish by Javi West Larrañaga and Benjamín Mejías Valencia)