Madrid equities slide as Catalan parliament declares indepen...| MENAFN.COM

Saturday, 02 July 2022 04:45 GMT

Madrid equities slide as Catalan parliament declares independence


(MENAFN- Gulf Times) The Madrid stock market sank yesterday, bucking an upwards trend in Europe as Catalan lawmakers voted to declare independence from Spain but Madrid immediately moved to quash the breakaway bid.
A motion declaring independence was approved with 70 votes in favour, 10 against and two abstentions, with Catalan opposition MPs walking out of the 135-seat chamber before the vote in protest at a declaration unlikely to be given official recognition.
Madrid's benchmark IBEX 35 index of major companies ended the session around 1.5% lower at 10,197.50 points.
Shares in Catalan banks were among the biggest losers.
CaixaBank, Spain's third largest lender, fell by around 5% while Sabadell, the country's fifth biggest bank, fell roughly 6%.
Nevertheless, elsewhere in Europe, the other main stock markets extended the previous day's rally after the European Central Bank said it would soon start to taper its monetary stimulus programme.
London's FTSE 100 closed up 0.3% at 7,505.03 points, Frankfurt's DAX 30 closed up 0.6% at 13,2217.54 points, Paris' CAC 40 ended up 0.7% at 5,494.13 points, while the EURO STOXX 50 finished the day up 0.4% at 3,652.23 points.
'Equities remain positive into the weekend, building on the recent recovery in bullish sentiment and rebounds from recent lows, said Accendo Markets analyst, Mike van Dulken.
The main factors behind the gains were better-than-expected earnings results in the US technology sector, the ECB's suggestion that its easy money policies would be around for some time and investors' unruffled feathers from geopolitical risks, van Dulken said.
The greenback shot up after the ECB said on Thursday it will reduce from January its purchases of government and corporate bonds to €30bn ($35bn) a month, from €60bn at present.
Policymakers, however, left themselves a nine-month horizon to decide on the next step for the quantitative easing (QE) policy.
'Now that QE has been reduced in half and simultaneously extended in duration again, the ECB has effectively maintained the same level of monetary stimulus as before, said Forex.com analyst Fawad Razaqzada.
'This is good news for the stock markets in the eurozone, he added.
The dollar advanced before publication of US economic growth data, as dealers eyed the passing of President Donald Trump's budget overnight by US Congress.
The development opens the way for debate over his tax overhaul.
'As monetary conditions tighten in the US, other major central banks are still keeping their policies extraordinarily loose — including the Bank of Japan, European Central Bank, Swiss National Bank and the Bank of England, added Razaqzada.
'The growing divergence of policy stances between the US and basically the rest of the world should keep the dollar supported in the long run.




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