Spanish Stocks Rise after Catalonia Leader’s Speech

Spanish stocks rise over European stocks Wednesday after Catalonia’s leader stopped short of declaring independence from Spain.

Catalonia’s leader, Carles Puigdemont, only made a symbolic declaration on Tuesday, easing worries after claiming a mandate to launch secession but stopping any formal steps to that end.

So far this year, Spain’s IBEX keeps it more than 10 percent incline, compared with the Euro STOXX 600’s 8 percent rise.

Spanish banks Sabadell and Caixabank, which decided to relocate their legal bases from Catalonia to a different part of Spain, experienced increases in their shares by 2.6 percent and 2.1 percent respectively, with peers BBVA gaining 2 percent and Santander, 1.6 percent.

An economist said in a note, “This episode could serve as a deterrent for other independence movements in Spain and Europe rather than lead to a rise in break-up risks. Markets rightly maintain their calm," referring to the recent Catalonia events.

Investors wait for the U.S. fuel inventory data, causing falls among mining stocks and oil and gas firms which weighs down the European market.

According to an analyst, “Estimates point to European third-quarter earnings growing 5.3 percent from the same period last year, which would be an increase of 2.3 percent excluding the energy sector.”

GEA Group, a German food-processing machinery firm, surged 6.3 percent as a result to hedge fund’s reveal of having a stake in the company.

On the other hand, Mondi falls to the bottom of the STOXX with a decline of 8.7 percent after it cut its full-year guidance.

Release of minutes from U.S. Federal Reserve’s September policy meeting was also awaited by the investors who are looking for clues involving the timing of future rate hikes.

MSCI Stocks Index

The 1.5 percent jump in Spain’s IBEX pushed the MSCI’s stocks index reach a record high.

Despite this, Spanish government bond yields went through their second-biggest decline in a month. A strategist explained, “There was a chance Puigdemont would have made a decisive declaration, so now yields are dropping because there is room for negotiation left.”

Euro continued to beat the dollar in a two-week top with it climbing as high as $1.18345. The U.S. dollar was down for its fourth day in a row and on its worst run since July.

A senior currency strategist in Tokyo pointed out that “Squabbles surrounding Trump’s efforts come as no surprise, but it is still not helping the dollar.” Seeing as the U.S. President Trump’s feud with Tennessee Senator Bob Corker raised concerns that the president’s proposed tax-code overhaul might fail.

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