NEW YORK, United States (AFP) — The Madrid stock market rebounded Thursday as the Spanish government moved to block a move by Catalonia to declare independence, while Wall Street stocks surged once again to fresh records ahead of key US jobs data.
The Spanish capital’s benchmark IBEX 35 shares index jumped 2.5 percent, largely offsetting the previous day’s 3.0-percent slump.
Trade was more muted elsewhere in Europe, with Frankfurt dipping, while Paris and London posted modest gains.
The euro meanwhile slid towards $1.17 — having topped $1.20 just two weeks ago — as Spain’s Catalonia crisis dragged on.
“The IBEX 35 is the best performer in Europe, which makes a nice change seeing the Spanish market lost the most ground this week,” said CMC Markets UK analyst David Madden.
While Madrid and Catalonia are still at loggerheads, Madden said that a move by Spanish authorities to suspend a meeting of the Catalan parliament Monday when lawmakers were expected to adopt an independence motion frustrates separatists.
“Nonetheless, investors will be fearful of the Spanish stock market while the Catalan question hangs over the country,” he added.
Shares in two Catalonia banks, which have been hammered in recent days, shot higher on reports they are considering moving their legal headquarters out of the region.
Spain’s fifth-biggest bank Sabadell, which confirmed its directors will discuss shifting its legal domicile away from Catalonia, saw its shares soar 6.2 percent
Media reports said Catalonia’s biggest bank, CaixaBank, was considering a similar move, and its shares rose 4.9 percent.
Bull run continues
Meanwhile, a bull run on Wall Street showed no signs of ebbing.
The broad-based S&P 500 jumped 0.6 percent to 2,552.07, its sixth straight record, the longest such streak since 1997.
The new all-time peak came ahead of the closely-watched September jobs report, which is expected to show the impact of major hurricanes that halted hiring in parts of the country. Analysts expect the US added just 75,000 jobs last month, an unusually low number.
If anything, the market’s bias will be to go still higher on tomorrow’s employment data because weak jobs data will be dismissed as weather-related, while an upside surprise will be seen as another vindication of a stronger economy, said Jack Ablin, chief investment officer at BMO Private bank.
“The path of least resistance is still higher,” he said.
Ablin attributed much of the market strength in the last week or so to the initial actions by Trump and congressional Republicans on tax cuts and the sense that “a tax plan or stimulus will actually be signed into law.”
Pound sinks
In Britain, the pound sank as investors fretted over Prime Minister Theresa May’s political future one day after a speech to the Conservative Party conference drew terrible reviews.
May was hoping to use the Conservative Party conference speech to reassert her authority following a dismal election showing, but was interrupted by a comedian handing her a notice of unemployment before succumbing to a persistent cough in front of a collapsing set.
“The convention was meant to be a unifying moment for the ruling conservatives but instead, has highlighted divides within the party and has played up concerns about political stability at critical time for the UK,” said Omer Esiner, analyst at Commonwealth Foreign Exchange.
Key figures around 2130 GMT
New York – DOW: UP 0.5 percent at 22,775.39 (close)
New York – S&P 500: UP 0.6 percent at 2,552.07 (close)
New York – Nasdaq: UP 0.8 percent at 6,585.36 (close)
Madrid – IBEX 35: UP 2.5 percent at 10,214.7 points (close)
London – FTSE 100: UP 0.5 percent at 7,507.99 (close)
Frankfurt – DAX 30: DOWN less than 0.1 percent at 12,968.05 (close)
Paris – CAC 40: UP 0.3 percent at 5,379.21 (close)
EURO STOXX 50: UP 0.5 percent at 3,612.20
Tokyo – Nikkei 225: FLAT at 20,628.56 (close)
Sydney – S&P/ASX 200: FLAT at 5,651.80 (close)
Hong Kong – Hang Seng: Closed for a public holiday
Shanghai – Composite: Closed for a public holiday
Euro/dollar: DOWN at $1.1706 from $1.1761 at 2100 GMT Wednesday
Dollar/yen: UP at 112.83 yen from 112.72 yen
Pound/dollar: DOWN at $1.3115 from $1.3250
Oil – Brent North Sea: UP $1.20 at $57.00 per barrel
Oil – West Texas Intermediate: UP 81 cents at $50.79
© Agence France-Presse
