The euro won some much-needed support after Catalan leader Carles Puigdemont suspended an independence declaration and called for talks with Madrid to resolve Spain's worst crisis in decades
London (AFP) - Madrid stocks rallied Wednesday after Catalan leader Carles Puigdemont called for independence to be suspended to allow for talks with the Spanish government, dealers said.
The Spanish capital’s benchmark IBEX 35 index of top companies was up 1.2 percent in afternoon trading, and the euro pushed higher against the dollar.
Other main European markets stabilised as dealers shrugged off news of Tokyo’s record run higher. Paris and London edged down, while Frankfurt drifted higher.
“The cooling of tensions and the return to political certainty in Spain is a big boost to investor confidence,” said analyst David Madden at CMC Markets UK.
“The announcement came yesterday after the European markets were closed and… traders are using the opportunity to buy back into the Spanish market,” he added.
Madrid vowed to examine “all options” Wednesday in a crisis cabinet meeting hours after Catalonia’s leaders said they had a mandate to declare independence but put it on hold, plunging the country into unknown territory.
But in a strange twist, Prime Minister Mariano Rajoy asked Puigdemont to clarify whether or not he had declared independence.
Rajoy has vowed to do everything in his power to prevent Catalan independence following a banned referendum in the region, which remains deeply divided over splitting from Spain.
- Tokyo surpasses 1996 peak -
In Asia, Japan’s main stock index finished at its highest in more than two decades on Wednesday, leading broad gains across the region after yet another record Wall Street close Tuesday.
Tokyo’s Nikkei 225 index finished the day 0.3-percent higher at 20,881.27 points – its best finish since December 1996.
Japan’s corporates have generated bumper profits and the economy is enjoying its best growth spurt for years, while equities have also been supported by a global rally.
Several other markets in the region are also sitting at multi-year highs, helped by hopes that US President Donald Trump’s proposed big-spending and tax-cutting promises will be implemented and fire up the world economy.
The Nikkei has rebounded from below the 15,000 mark in June last year after Britain’s vote to exit the EU pummelled world markets.
Wall Street opened flat on Wednesday as earnings season was set to get into gear later this week when several big banks publish their quarterly results.
Oil prices built on Tuesday’s solid gains, which saw both main contracts surge following news that Saudi Arabia planned to cut exports in November.
- Key figures around 1330 GMT -
Madrid - IBEX 35: UP 1.2 percent at 10,267.20
London - FTSE 100: DOWN 0.03 percent at 7,535.89 points
Frankfurt - DAX 30: UP 0.09 at 12,960.83
Paris - CAC 40: DOWN 0.2 percent at 5,353.21
EURO STOXX 50: UP 0.06 percent at 3,600.91
New York - DOW: UP 0.02 percent at 22,834.59
Tokyo - Nikkei 225: UP 0.3 percent at 20,881.27 (close)
Hong Kong - Hang Seng: DOWN 0.4 percent at 28,389.57 (close)
Shanghai - Composite: UP 0.2 percent at 3,388.28 (close)
Euro/dollar: UP at $1.1845 from $1.1809 at 2100 GMT
Pound/dollar: FLAT at $1.3205
Dollar/yen: UP at 111.49 yen from 112.45 yen
Oil - Brent North Sea: UP five cents at $56.60 per barrel
Oil - West Texas Intermediate: UP 15 cents at $51.07