EUROPE MARKETS: Spain's IBEX Slides Almost 1% On Looming Risk Of Catalan Independence
10 Oktober 2017 - 06:40PM
Dow Jones News
By Carla Mozee and Sara Sjolin, MarketWatch
German exports surge
Lingering worries over the Catalan crisis dragged Spanish stocks
down again Tuesday, dampening momentum for European stocks ahead of
a closely watched address by the Catalan separatist leader.
What stocks are doing: The Stoxx Europe 600 index ended nearly
flat, but in the red at 390.16 after a volatile session.
On Monday, the pan-European index rose 0.2%, aided in part by
gains for Spain-listed shares after hundreds of thousands of people
demonstrated against Catalonia's secessionist push
(http://www.marketwatch.com/story/hundreds-of-thousands-rally-in-barcelona-to-oppose-catalan-secession-2017-10-08).
Spanish stocks slide again: But in Madrid on Tuesday, the IBEX
35 fell 0.9% to 10,142.30 and posted the biggest loss among
European stock markets.
Shares of Banco Santander SA (SAN) (SAN) fell 2.9% and lender
BBVA SA (BBVA) (BBVA) lost 0.6%.
The losses came as Catalan President Carles Puigdemont was
scheduled to address the regional parliament at 6 p.m. Madrid time,
or noon Eastern Time. In particular, the focus is on whether he
will declare Catalonia's independence after last week's referendum
that showed around 90% of voters supported a split from Spain.
However, voter turnout was less than 50% in the referendum,
which has been declared by the illegal government in Madrid. The
standoff between the secessionists and Madrid is seen as the worst
political crisis in the country in four decades.
"The scene is set as Spanish police have surrounded the Catalan
parliament, and Mr. Puigdemont runs the risk of being arrested,"
said David Madden, market analyst at CMC Markets UK, in a note.
"Investors would prefer to see a reasoned negotiation about
Catalonia's future. Should we see a repeat of the heavy-handed
police tactics like we saw on the referendum day, it could send the
Spanish market into a tailspin," he added.
Maurice Obstfeld, the chief economist at the International
Monetary Fund, on Wednesday singled out the Catalan drama and
uncertainty from Brexit as major risks to the outlook for the
European economy
(http://www.marketwatch.com/story/imf-sees-risks-to-economic-outlook-from-brexit-and-catalonia-tension-2017-10-10).
Ahead of the address, the euro traded at $1.1805, up from
$1.1748 late Monday in New York. That rise is seen as driven by
hawkish comments from European Central Bank policy maker Sabine
Lautenschlaeger, who said on Monday the central bank should start
scaling back its aggressive bond buying program next year.
Stock movers: Moet Hennessy Louis Vuitton SE (LVMUY) rose 2.2%
after the company luxury goods company said third-quarter revenue
rose 14%
(http://www.marketwatch.com/story/lvmh-quarterly-sales-rise-14-2017-10-10),
boosted by organic growth in all its business.
Shares of other luxury stocks rose in step, with Christian Dior
SE (CDI.FR) up by 1.7%, Cie. Financière Richemont SA (CFR.EB)
rising 1%, and Hermès International (RMS.FR) gaining 1%.
Economic data: German exports surged
(http://www.marketwatch.com/story/german-exports-jump-on-strong-eurozone-demand-2017-10-10)
in August due to strong demand from the eurozone, rising 3.1% from
July and 7.2% from the same month in 2016.
French industrial production unexpectedly fell
(http://www.marketwatch.com/story/french-industrial-production-falls-unexpectedly-2017-10-10)
0.3% in August from July, compared with an expected gain of
0.4%.
The U.K. trade deficit in goods widened
(http://www.marketwatch.com/story/uk-trade-deficit-in-goods-hits-record-high-2017-10-10)
to 14.2 billion pounds ($18.6 billion) in August, hitting the
highest level on record, on a drop in the export of fuels and an
increase in imports of mechanical machinery.
Individual indexes: France's CAC 40 index ended slightly lower,
less than 0.1% down, at 5,363.65. Germany's DAX 30 index fell 0.2%
to close at 12,949.25, after eking out a fresh all-time closing
high on Monday.
The U.K.'s FTSE 100 closed 0.4% higher at 7,538.27
(http://www.marketwatch.com/story/uk-stocks-gain-ground-as-miners-get-boost-from-softening-dollar-2017-10-10),
even as the pound got a lift from the latest developments in the
country's political drama. Prime Minister Theresa May was seen as
warding off dissent within her government, at least
temporarily.
(END) Dow Jones Newswires
October 10, 2017 12:25 ET (16:25 GMT)
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