EUROPE MARKETS: Spanish Stocks End Lower As Catalan Standoff Continues
October 23 2017 - 12:14PM
Dow Jones News
By Carla Mozee, MarketWatch
Euro losing ground vs. dollar
Spanish stocks fell Monday as the political standoff between
Madrid and the Catalan 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 ended 0.2% higher at 390.74, for a
second straight session of gains.
In Madrid, the IBEX 35 gave up 0.6% to 10,161.40 for its lowest
close since Oct. 10.
Germany's DAX 30 index rose 0.1% to end at 13,003.14 and
France's CAC 40 added 0.3% to 5,386.81.
In London, the FTSE 100 ended slightly higher at 7,524.45.
Italy's FTSE MIB rose 0.1% to 22,379.16 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 overseas buyers.
"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 said.
Stock movers: GKN PLC (GKN.LN) rose 5.1%, 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) closed up 1.8% after the airline
reached a pension scheme agreement with a pilots union.
Assicurazioni Generali SpA (G.MI) climbed 0.7% 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
noncore, Generali will soon be ready in our view to redeploy
capital," said Jefferies analysts.
(END) Dow Jones Newswires
October 23, 2017 11:59 ET (15:59 GMT)
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