By Carla Mozee and Sara Sjolin, MarketWatch

Germany's DAX closes above 13,000 for first time ever

Stocks listed in Spain dropped Monday, weighing on the pan-European benchmark, after the central government in Madrid gave Catalonia's separatist leaders until Thursday to drop their push for independence.

In Madrid, the IBEX 35 fell 0.8% to close at 10,181.40, falling for a third straight session. As the index extended its loss from the open, the broader Stoxx Europe 600 erased its gain to end flat at 391.41.

Spain's Deputy Prime Minister Soraya Saenz de Santamaria said Catalan leader Carles Puigdemont has until 10 a.m. local time, or 4 a.m. Eastern Time, on Thursday to back away from his bid to make the region independen (http://www.marketwatch.com/story/madrid-gives-catalan-leaders-until-thursday-to-drop-independence-push-2017-10-16)t.

The move from Madrid came after Puigdemont ignored an ultimatum from the government to provide a clear answer on whether the region has declared independence and instead said his aim is for two months of talks to discuss the northeastern region's break from Spain (http://www.marketwatch.com/story/catalan-leader-dodges-clear-declaration-of-independence-2017-10-16).

That lack of response, seen as an act of defiance, has opened the door for the central government to take over control of the region and promises to prolong the country's political crisis. If the Catalan leader sticks to his independence plans, Madrid could end the region's home rule, by triggering the so-called Article 155 of the Spanish constitution. That is referred to by some as the "nuclear option."

"It seems that at this point the triggering of Article 155 is the baseline scenario unless Puigdemont backtracks before Thursday or calls for early elections," analysts at Barclays said in a note.

"If Article 155 is enacted, the more radical supporters of independence are likely to take the confrontation to the streets with more demonstrations and the potential for further clashes," they said.

The euro traded at $1.1810, down from $1.1821 late Friday in New York.

Stock movers: Shares of lenders Banco de Sabadell SA (SAB.MC) and BBVA SA (BBVA) (BBVA) closed near the bottom of the IBEX, declining 2.8% and 1.8%, respectively. Siemens Gamesa Renewable Energy SA (SGRE.MC) skidded 6.3% after the energy company cut its earnings forecasts.

ConvaTec Group PLC (CTEC.LN) plunged 27% in London after the medical technologies company cut its full-year sales forecast.

Shares of Novo Nordisk AS (NOVO-B.KO) (NOVO-B.KO) climbed 5% after a preliminary review from the U.S. Food and Drug Administration concluded that the Danish insulin maker's semaglutide is effective and carries no heart risk.

Other indexes: Germany's DAX 30 index rose 0.1% to 13,003.70, closing above the 13,000 mark for the first time ever.

France's CAC 40 index rose 0.2% to 5,362.88, while the U.K.'s FTSE 100 index edged down 0.1% to 7,526.97.

 

(END) Dow Jones Newswires

October 16, 2017 12:07 ET (16:07 GMT)

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