EUROPE MARKETS: Spanish Stocks Lower As Catalan Standoff Continues, But DAX Eyes Record
October 23 2017 - 5:37AM
Dow Jones News
By Carla Mozee, MarketWatch
Euro losing ground vs. dollar
Spanish stocks fell Monday as the political standoff between
Madrid and the Catalonian region wore on, but a drop in the euro
appeared to provide a lift to other European markets.
What stock indexes are doing
The Stoxx Europe 600 index was up 0.2% to 390.97. Only the
financial and consumer services groups fell. The regional benchmark
on Friday rose 0.3%
(http://www.marketwatch.com/story/european-stocks-nudge-higher-as-volvo-rallies-2017-10-20),
but lost 0.3% for the week, its first weekly loss in six.
In Madrid, the IBEX 35 gave up 0.3% to 10,195.40, but managed to
pare deeper losses. There, shares of CaixaBank SA (CABK.MC) and
Bankia SA (BKIA.MC) each fell 1.1%.
Germany's DAX 30 index rose 0.4% to 13,041.09 and France's CAC
40 added 0.4% to 5,391.82, as both indexes started to gain more
traction after a lackluster open. The DAX was once again within
striking distance of a new record close.
In London, the FTSE 100 turned up 0.1% to 7,530.11.
Italy's FTSE MIB was fractionally lower at 22,343.45 after
voters in two regions in the northern part of the country backed
more autonomy.
What's driving markets?
The euro was losing ground, trading at $1.1745 versus $1.1783
late Friday in New York. Traders appeared to be turning their
attention to Thursday's monetary policy decision from the European
Central Bank, led by President Mario Draghi.
"Markets are expecting asset purchases to be cut in half, to
around EUR30 billion. However, the duration will likely have more
impact on the direction of the single currency. If Mr. Draghi
signaled that QE might continue running beyond December 2018, it
would be interpreted as a dovish taper, thus pushing further
expectations of a rate hike and dragging the euro lower," said
Hussein Sayed, chief market strategist at FXTM, in a note.
Shares of exporters can rise on the back of a weaker euro on
prospects a lower value of the currency can, in part, make European
products less expensive for oveseas buyers to purchase. Among
exporters, British American Tobacco PLC (BATS.LN) rose 1.4%, auto
maker Daimler AG (DAI.XE) gained 1% as did shares of luxury goods
maker LVMH Moet Hennessy Louis Vuitton .
"The stalemate between Madrid and Catalonia still continues, and
this is keeping the pressure on Spanish stocks," wrote CMC Markets
analyst David Madden. Spain's government is moving to strip
Catalonia of its autonomous powers and "impose direct rule, and
even though we haven't had a major reaction from the Catalan
politicians, traders are getting nervous," Madden added.
Stock movers: GKN PLC (GKN.LN) rose 3.4%, near the top of the
Stoxx 600, following a Sunday Times report the company is
considering a split of its aerospace and automotive businesses
(https://www.thetimes.co.uk/article/gkn-which-makes-wing-tips-for-airbus-and-parts-for-mercedes-eyes-split-to-create-two-ftse-champions-x7c2t6bj0).
Air France-KLM SA (AF.FR) was up 1.6% after the airline reach a
pension scheme agreement with a pilots union.
Assicurazioni Generali SpA (G.MI) was up 0.8% after Jefferies
upgraded the Italian insurance and financial services company to
buy from hold.
"Following decades of political intrigue we believe Generali is
finally free to forge its own strategic destiny. Cash earnings are
accelerating, and together with the capital being released from
non-core, Generali will soon be ready in our view to redeploy
capital," said Jefferies analysts.
(END) Dow Jones Newswires
October 23, 2017 05:22 ET (09:22 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Mar 2024 to Apr 2024
FTSE 100
Index Chart
From Apr 2023 to Apr 2024