Despite the advance, the dominant note was one of caution, awaiting an important inflation report in the United States on Wednesday - which could reinforce the idea that the US Federal Reserve's plans to cut interest rates are cooling off - and the inauguration of Donald Trump on January 20.
"The logical thing is for the market to go into 'risk-off' mode, awaiting the US CPI data on Wednesday (which is expected to rebound from +2.7% to +2.9% in December) and Trump's inauguration next Monday when we will start to see how far his announced measures/threats go," Bankinter analysts said on their Telegram channel.
"In this environment it is difficult to see bond IRRs (rates of return) easing and stock markets advancing without faltering, although Wall Street bounced yesterday with the exception of technology," they added.
In recent sessions the prospect of higher than previously expected interest rates in the US and persistent inflation have penalized the fixed income market, pushing yields higher, which has also translated into punishment for equities.
Elsewhere, financial markets are looking forward to the start of the US corporate earnings season, with the release of several banks' figures this week, while on the geopolitical front, hopes are rising for a deal to halt Israeli attacks on Gaza.
Renta 4 analysts also draw attention to the political crisis in France, where the inaugural appearance of the new French Prime Minister will take place, focusing on the negotiations on pension reform.
"(...) it should be borne in mind that if Bayrou gives in too much to the left, he could lose the support of the right. In the event that (François) Bayrou's government does not have sufficient support, the political crisis in France would intensify," these analysts said in their morning report.
Against this backdrop, at 08:05 GMT on Tuesday, the Spanish selective stock market index IBEX 35 was up 64.60 points, or 0.55%, to 11,752.80 points, while the FTSE Eurofirst 300 index of large European stocks was up 0.54%.
In the banking sector, Santander rose 1.22%, BBVA gained 1.37%, Caixabank advanced 0.74%, Sabadell gained 1.12%, Bankinter gained 1.05%, and Unicaja Banco showed little variation.
Among the large non-financial stocks, Telefónica fell 0.10%, Inditex advanced 0.51%, Iberdrola dropped 0.19%, Cellnex gained 0.38%, and the oil company Repsol lost 1.05%.
(Information by Javi West Larrañaga; editing by Tomás Cobos).