LONDON: The Madrid stock market tumbled two percent Wednesday on intensifying concerns over the deepening Catalan independence crisis in Spain, dealers said.
European indices mostly fell but Frankfurt flatlined as investors in Germany played catch-up after the country's public holiday Tuesday.
The dollar fell across the board as attention begins to focus on the likely make-up of the new US Federal Reserve board.
In London, the benchmark FTSE 100 index dipped as traders brushed off a survey showing activity in the British services sector, a key driver of the UK economy, rebounded last month.
Europe pulled lower overall despite another record-breaking Wall Street overnight performance on news of surging car sales.
Earlier, Tokyo and Hong Kong extended gains.
"Wall Street is going from one record high to another record as positive momentum persists -- but eurozone equities have failed to follow amid ongoing jitters following the unofficial independence referendum in Catalonia," NFS Macro analyst Nick Stamenkovic told AFP.
"Spanish stocks, particularly banks have been the main casualty."
- 'Political risk on agenda' -
Tensions mounted in Spain after Catalonia's leader vowed that the region would declare independence within days, defying a stern warning from the country's king that national stability was in peril.
The courts meanwhile placed Catalan police officials and pro-independence civil leaders under investigation for alleged "sedition" as Spain sank deeper into its worst political crisis in decades.
King Felipe VI branded the independence drive illegal and undemocratic, throwing his weight behind the national government.
"Political risk is back on the agenda in Europe," added Stamenkovic, adding that the focus would switch next year to Italy's election.
Investors are broadly upbeat about the global economic outlook and remain buoyed by the release last week of US President Donald Trump's tax-cutting plans.
Ahead, investors are looking ahead to the release of key US jobs data on Friday.
With Fed boss Janet Yellen's term due to end in February, markets will be closely watching for clues about Trump's choice to take over -- a decision expected to be made in two to three weeks.
Comments
Comments are closed for this article.