EUROPE MARKETS: Spanish Stocks Drive Higher, Aiding Advance For European Stocks

By Carla Mozee, MarketWatch Features Dow Jones Newswires

German industrial output beats forecasts

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European stocks gained ground Monday, finding upside support from advances in Spanish stocks and strength in German economic data.

The Stoxx Europe 600 index rose 0.3% to 390.71, with only the basic materials sector lagging behind. Utility and tech shares logged the best performances. The index on Friday fell 0.4% (http://www.marketwatch.com/story/european-stocks-slip-with-us-jobs-data-in-view-spanish-banks-resume-selloff-2017-10-06) but posted a weekly gain of 0.3%.

Spain's IBEX 35 stood out by rising as much as 1% to 10,306.80, its highest intraday level since Oct. 2, according to FactSet data. The move came after hundreds of thousands of people gathered in Barcelona on Sunday to protest Catalonia's secessionist push (http://www.marketwatch.com/story/hundreds-of-thousands-rally-in-barcelona-to-oppose-catalan-secession-2017-10-08). The demonstration was organized by Catalan Civil Society, an anti-separatist group.

Among gainers on the index, shares of Banco de Sabadell SA (SAB.MC) rose 2% and CaixaBank SA (CABK.MC) picked up 1.9%. The banks last week said they would move their legal headquarters out of the Catalonia region. Catalonia's independence referendum on Oct. 1 was declared illegal by Spanish Prime Minister Mariano Rajoy.

"The demonstrations showed us that there are two sides to the Catalan situation," said David Madden, market analyst at CMC Markets UK, in a note.

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"The Spanish government has made it easier for companies in Catalonia to relocate their headquarters to a different part of Spain. This form of financial pressure could make life difficult for the Catalans that favor separation for Spain," he said. "That being said, there is still talk of the region declaring independence this week. Spanish stocks were hit hard by the political uncertainty last week, and global investors will look elsewhere for opportunities while the situation continues."

Data: Trading got under way Monday with figures showing German industrial output grew 2.6% in August (http://www.marketwatch.com/story/german-industrial-output-rises-more-than-seen-2017-10-09), outstripping expectations of a 0.9% increase in a Wall Street Journal poll of economists.

"Strong industrial production data provide further evidence that the economy has left [the] summer lull behind and has returned to maximum speed," said ING Chief Economist Carsten Brzeski in a note.

"While the [German government's] coalition talks have not even started (and are also unlikely to start before Sunday's regional elections in Lower Saxony), the German economy is powering ahead," he said. "In fact, Germany can take comfort from the experience of its Western neighbors which shows that 'only' having a caretaking government for a long while is no obstacle to strong growth."

Other indexes: Germany's DAX 30 index was up 0.1% to 12,971.34 and France's CAC 40 index was flat around 5,359.64. But the U.K.'s FTSE 100 was off 0.1% at 7,517.13, pulling back from a two-month high.

In the currency market, the euro traded at $1.1731, little changed from $1.1732 late Friday in New York.

Stock movers: Accor SA (AC.FR) rose 0.8% after the French hotels group bid about 1.18 billion Australian dollars ($916.6 million) (http://www.marketwatch.com/story/hotel-giant-accor-bids-917-million-for-mantra-2017-10-08) for lodging company Mantra Group Ltd. (MTR.AU)

K+S AG (SDF.XE) fell 3.2% following plans by the company to integrate its potash and salt units as part of an overhaul.

(END) Dow Jones Newswires

October 09, 2017 04:53 ET (08:53 GMT)