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Political risks weigh on euro & Spanish stocks

Monday, October 16, 2017 - 01:35

Spanish stocks lagged a steady European market as uncertainty over the Catalonia crisis returned after the region's leader missed a deadline to clarify whether he had declared independence. As Laura Frykberg reports, elections in Austria and Germany also added to the political risks in the euro zone.

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Spain's call for clarity, falling on deaf ears in Catalonia. The region's leader failing to answer whether or not he declared independence last week. Instead calling for dialogue with Madrid. The move hasn't played out well on Spanish markets. The IBEX fell 0.7 percent on the news. (SOUNDBITE) (English) DARREN SINDEN, MARKET ANALYST, PEPPERSTONE, SAYING: "We can all remember how fractious Spanish politics can be. We've seen tanks on the streets in the country before in living memory and I don't think that's the situation that many people in Europe want to countenance again." Uncertainty in Austria also hit the euro. It dipped as investors feared the prospect of a coalition government in Vienna including the far-right Freedom Party. (SOUNDBITE) (English) DARREN SINDEN, MARKET ANALYST, PEPPERSTONE, SAYING: "Any hopes of a swift transition of further integration with the EU that President Macron might like to think he can achieve are probably dashed a bit there, so there is political uncertainty, and Populism isn't dead. it is probably going to be an issue going forward for the next several years to come." Germany too has increased political risk. After the Social Democrats beat Angela Merkel's conservatives in regional elections. A major setback for the Chancellor, who's negotiating a three-way coalition for the national government. Optimism over global growth - which had sent Asia shares to 10 year highs - offset the gloom. The pan-European STOXX600 added just 0.1 percent in morning trade.

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Political risks weigh on euro & Spanish stocks

Monday, October 16, 2017 - 01:35