Spanish stocks and the euro fell while Spanish government bond yields hit one-month highs yesterday, after Catalan separatists won a regional election, likely prolonging political tensions that may hurt the euro zone’s fourth-largest economy.
The IBEX fell as much as 1.2 per cent, while financial stocks were the biggest drag on stock indices across the region, with the euro zone banks index falling nearly one per cent.
The pan-European STOXX index dipped only 0.1 per cent, while Spanish stocks were among the heaviest fallers, confirming analyst expectations that any shake-out from the Catalonia vote would be mostly confined to Spain.
Spanish stocks were Europe’s best-performing benchmark for much of the year, before October’s independence referendum turmoil sent the IBEX tumbling.
It was last nine per cent down from its May peak.
The Spanish result is also a setback for the European Union, which must now brace for more secessionist noise as it grapples with the disruption of Brexit and east European discontent.
Germany’s DAX edged down 0.2 per cent, while France’s CAC 40 fell 0.3 per cent. Britain’s FTSE100 hit a fresh record high in holiday-shortened trade.
Having fallen as low as $1.1817 on preliminary results from regional votes in Catalonia, the euro trimmed its losses and was last at $1.1853, down 0.2 per cent on the day.
Spain’s 10-year borrowing costs rose five basis points to a one-month high of 1.52 per cent in early trades, before settling back at 1.49 per cent. The premium investors demand for holding Spanish bonds over top-rated German peers widened six bps to around 111 bps at one stage.
Meanwhile, the MSCI index of world stocks was flat.
Asia-Pacific equities took their cues from Wall Street, where all three main indexes posted gains on strength in bank and energy stocks and news the US economy grew in the third quarter at its fastest pace in more than two years.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.5 per cent higher. Hong Kong’s Hang Seng added 0.3 per cent and Shanghai dipped 0.1 per cent.
Bitcoin fell as much as 14.7 per cent to below $14,000 on the Bitstamp exchange yesterday, last trading at $13,940.
The cryptocurrency, which was at about $1,000 at the start of the year, had climbed to a record high of $19,666 last Sunday.
In commodities, US crude futures slipped 0.5 per cent to $58.07 per barrel.