EUROPE MARKETS: Spain's IBEX Slides Almost 1% On Looming Risk Of Catalan Independence
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 .
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 (>> Banco Santander, S.A.) (>> Banco Santander, S.A.) fell 2.9% and lender BBVA SA (>> Banco Bilbao Vizcaya Argentaria S.A.) (>> Banco Bilbao Vizcaya Argentaria S.A.) 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 .
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% , boosted by organic growth in all its business.
Shares of other luxury stocks rose in step, with Christian Dior SE (>> Christian Dior SE) up by 1.7%, Cie. Financière Richemont SA (>> Compagnie Financière Richemont) rising 1%, and Hermès International (>> Hermès International) gaining 1%.
Economic data: German exports surged 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 0.3% in August from July, compared with an expected gain of 0.4%.
The U.K. trade deficit in goods widened 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 , 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.