EUROPE MARKETS: Spanish Stocks Rally As Worries Over Catalan Independence Ease
October 11 2017 - 3:55AM
Dow Jones News
By Sara Sjolin, MarketWatch
Euro climbs as secession process is suspended for now
Spanish stocks bounced higher on Wednesday, as worries over the
standoff between Catalonia and Madrid eased, after Catalan leader
Carles Puigdemont suspended independence plans for now.
What stocks are doing: The IBEX 35 index rallied 1.6% to
10,301.50. The Madrid benchmark was rebounding from a 0.9% loss on
Tuesday, when concerns over an escalation in Spain's political
crisis blunted the appetite for investing.
The pan-European Stoxx Europe 600 index was flat at 390.16.
Spanish de-escalation: The upbeat tone for Spanish stocks came
after Catalan President Carles Puigdemont spoke to the Catalan
parliament late Tuesday. The separatist leader told lawmakers he
still intends to declare independence
(http://www.marketwatch.com/story/catalan-president-opts-for-spanish-dialogue-call-over-outright-independence-declaration-2017-10-10)
for the Spanish region, but was suspending the secession process to
allow negotiations with the central government in Madrid first.
The move is seen as cooling off the political crisis in Spain --
considered the worst in four decades -- and a step back from a
potential split of the country. Spanish Prime Minister Mariano
Rajoy will address the issue in a speech to the national parliament
later on Wednesday.
"[He] will unlikely sound compliant with the Catalan
independence plans. From a Spanish perspective, it is a fact that
the Catalan government crossed the line by running a referendum
that Spain qualified as illegal. Rajoy's tone will matter. A strong
opposition could escalate the crisis," said Ipek Ozkardeskaya,
senior market analyst at London Capital Group, in a note.
How Spanish assets responded: Spanish banks were among biggest
advancers in Europe after the independence talks were put on hold.
Shares of Banco de Sabadell SA (SAB.MC) rose 2.2%, CaixaBank SA
(CABK.MC) gained 2.1%, and Banco Santander SA (SAN) (SAN) climbed
1.1%.
The euro moved higher after Puigdemont's speech on Tuesday
evening local time and continued higher in Wednesday's trade. The
shared currency bought $1.1829, up from $1.1808 on Tuesday and
$1.1743 on Monday.
The yield on 10-year Spanish government bonds fell 4 basis
points to 1.651%, according to Tradeweb.
Other indexes: Germany's DAX 30 index was marginally higher at
12,953.59, while France's CAC 40 index fell 0.2% to 5,350.83.
The U.K.'s FTSE 100 index lost 0.1% to 7,529.65.
Eurozone news: Dutch finance minister Jeroen Dijsselbloem said
he'll leave domestic politics
(http://www.marketwatch.com/story/eurogroup-head-jeroen-dijsselbloem-to-quit-dutch-politics-2017-10-11)
when a new government takes office on Oct. 25. He'll complete his
term as president of the Eurogroup of eurozone finance ministers,
which expires in January.
Stock movers: Shares of Mondi PLC (MND.JO) slid 8.2% after the
packaging and paper group said underlying performance for the year
is expected to be modestly below market expectations
(http://www.marketwatch.com/story/mondi-profit-rises-8-on-higher-prices-2017-10-11).
Gerresheimer AG (GXI.XE) put on 2.1% after a well-received
earnings report.
Economic data: Spanish inflation in September fell to 1.8% from
1.9%, slightly missing forecasts of a 1.9% reading.
After the European markets close, the minutes from the U.S.
Federal Reserve's September meeting are due. Monetary policy in the
U.S. is important to traders in Europe as it's a key driver for
markets globally.
(END) Dow Jones Newswires
October 11, 2017 04:40 ET (08:40 GMT)
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