The IBEX 35 opened in negative territory on Wednesday amid growing market sentiment that interest rates could remain at high levels for longer than investors would like, pushing up yields in the debt market and weighing on stock market prices.

The latest macroeconomic data from the United States has pointed to the strength of the economy and persistent inflation, while in Europe a consumer price indicator from Germany is expected on Wednesday (0800 GMT) that could show a rebound from 2.2% in April to 2.4% in May (on a year-on-year basis).

"(This) rebound (...) will remind that the road to the 2% target will remain bumpy, and would still call into question a second rate cut (by the ECB) in July, after the first cut on 6-June that we take for granted (95% probability), especially after yesterday's moderation in April consumer inflation expectations released by the ECB on both 1-year (2.9%e vs 3% previous) and 3-year (2.4% vs 2.5% previous)," said analysts at Renta 4.

The outlook of concern about central banks' monetary policies left its mark on fixed income, where eurozone bond yields rose to one-month highs, also awaiting the inflation data for the eurozone as a whole to be released on Thursday.

Nor did the rebound in oil prices contribute to optimism in the stock markets due to expectations of reduced production in a context of increased demand, in addition to the intensification of the conflict in Gaza.

In any case, analysts point out that activity should be limited pending the US consumption deflator (Friday), an indicator of maximum relevance for the financial markets as it is the Federal Reserve's favorite measure of inflation.

In equities, at 07:05 GMT on Wednesday, the selective Spanish stock market IBEX 35 fell 37.90 points, or 0.34%, to 11,238.10 points, while the FTSE Eurofirst 300 index of large European stocks fell 0.20%.

In the banking sector, Santander lost 0.21%, BBVA fell 0.18%, Caixabank advanced 0.08%, Sabadell gained 0.29%, Bankinter dropped 0.08%, and Unicaja Banco lost 0.23%.

Among the large non-financial stocks, Telefónica fell 0.43%, Inditex advanced 0.21%, Iberdrola dropped 0.82%, and Cellnex fell 1.24%.

The oil company Repsol, which rose by 1.12%, and Técnicas Reunidas, an engineering group whose main clients are in the oil and gas business, rose by 2.44%.

(Information by Tomás Cobos; edited by Javi West Larrañaga)