The Madrid stock market sank on Friday, bucking an upward trend in Europe and the US 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 favor, 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 percent lower.
Shares in Catalan banks were among the biggest losers. CaixaBank, Spain’s third largest lender, fell by around five percent while Sabadell, the country’s fifth biggest bank, fell roughly six percent.
“We are likely to see more sustained unrest, possibly including strikes, as well as more serious clashes between national police and pro-independence activists,” Eurasia Group analyst Federico Santi predicted in a note.
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 program.
US markets were also upward bound, as blowout earnings by Microsoft, Google parent Alphabet and other tech giants propelled the Nasdaq 2.2 percent higher to an all-time record of 6,701.26.
Amazon alone surged 13.2 percent, adding nearly $62 billion in market capitalization in a single day after reporting only a modest rise in third-quarter profit but a 34 percent jump in revenues to $43.7 billion.
“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.
– Dollar strengthens –
The greenback shot up after the ECB said Thursday it will reduce from January its purchases of government and corporate bonds to 30 billion euros ($35 billion) a month, from 60 billion at present.
Policymakers, however, left themselves a nine-month horizon to decide on the next step for the quantitative easing (QE) policy.
The dollar added to those gains on Friday after US third-quarter economic growth came in at a better-than-expected 3.0 percent as the US economy absorbed the shocks of Hurricanes Harvey, Irma and Maria.
Traders have also gotten more bullish on the greenback in light of progress in Washington on President Donald Trump’s tax cut, which has cleared a few preliminary hurdles in Congress but still faces many steps.
Next week’s US schedule of events is busy, with a Federal Reserve meeting and key data, including the October jobs report.
“Political developments may dominate the headlines, but there are also many US economic reports on next week’s calendar that will shed light on how well the US economy snapped back after the hurricanes,” said Kathy Lien of BK Asset Management.
– Key figures around 2100 GMT –
New York – DOW: UP 0.1 percent at 23,434.19 (close)
New York – S&P 500: UP 0.8 percent at 2,581.07 (close)
New York – Nasdaq: UP 2.2 percent at 6,701.26 (close)
Madrid – IBEX 35: DOWN 1.5 percent at 10,197.50 (close)
London – FTSE 100: UP 0.3 percent at 7,505.03 (close)
Frankfurt – DAX 30: UP 0.6 percent at 13,2217.54 (close)
Paris – CAC 40: UP 0.7 percent at 5,494.13 (close)
EURO STOXX 50: UP 0.4 percent at 3,652.23 (close)
Tokyo – Nikkei 225: UP 1.2 percent at 22,008.45 (close)
Hong Kong – Hang Seng: UP 0.8 percent at 28,438.85 (close)
Shanghai – Composite: UP 0.3 percent at 3416.81 (close)
Euro/dollar: DOWN at $1.1604 from $1.1652
Pound/dollar: DOWN at $1.3131 from $1.3160
Dollar/yen: DOWN at 113.67 yen from 114.00 yen
Oil – West Texas Intermediate: UP $1.26 at $53.90 per barrel
Oil – Brent North Sea: UP $1.14 at $60.37 per barrel