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Home>UPDATE: Spain stocks rally as investors absorb Catalonia deadlock

UPDATE: Spain stocks rally as investors absorb Catalonia deadlock

UPDATE: Spain stocks rally as investors absorb Catalonia deadlock

10/05/2017

By Sara Sjolin and Barbara Kollmeyer, MarketWatch

Prime Minister Mariano Rajoy makes first comments about crisis

European stocks ended a volatile session mainly higher on Thursday after Madrid suspended a parliamentary session in Catalonia in an attempt to block the region from declaring independence.

The Stoxx Europe 600 index ended 0.2% higher at 391.03, rising for a 10th out of the past 11 session.

Spain's IBEX 35 index rallied 2.5% to 10,214.70, after posting its biggest loss in 15 months on Wednesday. Spanish assets have been battered in recent days after scenes of violence from Sunday's independence referendum in Catalonia went global and Madrid declared the vote illegal.

The standoff between the central government and the secessionists deepened on Wednesday after separatist parties set out a course to declare independence on Monday (http://www.marketwatch.com/story/catalonias-secession-from-spain-may-come-as-soon-as-monday-2017-10-04), requesting the regional parliament meet that day to discuss the referendum result. About 90% voted for independence, but less than 50% of the Catalan people participated in the referendum.

Catalan President Carles Puigdemont in a televised address on Wednesday night said he's open to a mediation process (http://www.marketwatch.com/story/catalan-president-puigdemont-says-he-remains-open-to-mediation-reports-2017-10-04), but that the government has rejected this. He also accused King Felipe VI of acting as a mouthpiece for Madrid, saying the king's speech on Tuesday had "disappointed many in Catalonia, who appreciate you...[and] expected another tone from you, a plea for dialogue and harmony."

On Thursday, Spanish Prime Minister Mariano Rajoy told Spanish news agency EFE that he has asked Puigdemont to not go ahead with plans to declare independence next week, to avoid "greater evils," according to an Associated Press report (https://apnews.com/582408bff5c948c0ad81bbafd93b9f16?utm_campaign=SocialFlow&utm_source=Twitter&utm_medium=AP). Spain's constitutional court has ordered that a special session of Catalonia's parliament planned for next week to be suspended temporarily, AP reported.

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