Home news Spanish shares bounce back after unity rally

Spanish shares bounce back after unity rally

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Spain’s stock market has started the week on a high as investors were cheered by an anti-independence rally and results of a poll ahead of regional elections.

The Ibex – which had fallen sharply on Friday’s independence declaration – bounced back with a 1.5% gain in early trading on Monday, amid flat stock market performances elsewhere in Europe.
Catalan banks Caixabank and Sabadell, which have both seen shares under pressure in the wake of the region’s disputed referendum, climbed about 3%.
Spain’s state-owned lender Bankia, which posted a 10% fall in third quarter profits on Monday, saw shares climb nearly 2%.
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Video: How important is Catalonia to Spain?

The country also saw yields on its bonds – parcels of government debt – fall following the weekend’s developments, effectively reducing the cost of Madrid’s borrowing.
Kathleen Brooks, research director at City Index, said: “After an escalation of the Catalan crisis on Friday, Spanish markets are in recovery mode at the start of this week.”
It follows a huge weekend rally in Barcelona in favour of a maintaining a unified Spain and a poll on Sunday showing a small lead for political parties opposed to a split.

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Video: Thousands join pro-unity march in Catalan capital Barcelona

Meanwhile official figures showed the Spanish economy grew by 0.8% in the third quarter, down from 0.9% in the second quarter.
The data covered a period before the referendum and suggested the economy continued to be lifted by the eurozone-wide recovery.
Catalonia represents about a fifth of Spain’s economy, which is itself the fourth largest in the eurozone.
Economists at JP Morgan have notched down their expectations for growth amid the uncertainty surrounding the region’s future.
Berenberg’s chief economist Holger Schmieding said the economic impact of the turmoil was likely to remain “temporary and muted” though warned that a prolonged stand-off could see economic damage spilling into next year and cautioned against a heavy-handed approach by Madrid.

Source: SKY