The Spanish stock market on Friday tumbled after a victory for Catalan separatists in a snap poll, while London hit an intraday record before retreating.
Madrid’s benchmark IBEX 35 index of top companies ended the session about 1.2 percent lower after the Catalan vote injected new uncertainty into one of Europe’s biggest economies.
With turnout at a record high of 82 percent, Thursday’s election handed a mandate back to the region’s ousted separatist leaders after they campaigned from exile and behind bars.
“Investors in Spain lost their Christmas cheer,” IG Group PLC analyst Jasper Lawler said. “It’s a frustrating result for shareholders invested in Spain to capture the country’s rising economic fortunes. Political disruption looks like it will be an ongoing feature of investing in Spain.”
Frankfurt stocks on Friday declined 0.3 percent and Paris dipped 0.4 percent.
The Catalan result is “likely to keep tensions between Madrid and Barcelona elevated, but, at least for now, not likely seen as leading to an imminent breakup of the eurozone’s fourth-largest economy,” Commonwealth Foreign Exchange analyst Omer Esiner said.
The pan-European STOXX 600 on Friday closed down 0.1 percent at 390.28, an increase of 0.5 percent from a close of 388.19 a week earlier.
London’s FTSE 100 zoomed its way to another intraday record high at 7,614.40 points in low-volume trading, boosted by overnight Wall Street gains and the softer pound.
However, the FTSE on Friday closed at 12:30pm for an early finish at 7,592.66 points, down almost 0.2 percent from Thursday. That was an increase of 1.4 percent from a close of 7,490.57 on Dec. 15.
Trade was choppy, with many investors away for extended Christmas and New Year festivities.
“I think the softer pound has played an important role over the last month or so, as has the tax reform-fueled Santa rally in the US, with a number of FTSE 100 firms having exposure to the economy,” Oanda Corp analyst Craig Erlam told reporters.
The Frankfurt, Madrid and Paris stock markets traded as normal on Friday, but London faced a half-day session.
All four European bourses are to be closed tomorrow and on Tuesday for Christmas and Boxing Day, but reopen on Wednesday.
Additional reporting by staff writer
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