Europe close: Stocks little changed as Wall Street takes a breather

12 October 2017

(ShareCast News) - European stocks finished the session little changed as Wall Street took a breather following a recent string of gains.
That came amid a heightened focus in markets on whether stocks were rising too far and too fast and to what extent central banks should take that into account.

As an aside, but not wholly unrelated perhaps, Bitcoin prices were hitting fresh record highs in early trading.

Against that backdrop, by the closing bell the benchmark Stoxx 600 was 0.03% or 0.13 points higher to 390.28, while the German Dax had added 0.09% or 12.21 points to 12,982.89.

In all things Spain, the clock was ticking as markets waited on Catalan president Carles Puigdemont's response to a petition from Madrid for greater clarity on his plans and the stance of the regional government.

Commenting on the situation in markets, David Madden, market analyst at CMC Markets UK, said: "The ball in now in the separatists' court, and given the update from the Catalan President, Carles Puigdemont on Monday, it doesn't appear that he is too keen to unilaterally declare independence.

"Mr Puigdemont risks having direct rule being imposed from Madrid, but then again, he may secretly desire that in order to stoke nationalist tensions. The IBEX 35, along with other major European indices is slightly lower on the day."

Related to the above, analysts at Deutsche Bank raised their recommendation on Spanish stocks from an 'underweight' to an 'overweight' as - in their opinion - the tail risks of a break-up of the country had faded.

Following 6% underperformance for Spanish shares as a group since early August, mostly on the back of Catalonia independence jitters, they said that "pricing looks attractive".

On the other side of the equation, overnight the minutes of the US central bank's last policy meeting indicated that "many participants" had shown concern that low inflation readings might not only reflect transitory factors.

Euro area industrial production data for August jumped by 1.4% month-on-month in August (consensus: 0.5%).

Meanwhile, in corporate news, Germany's Innogy purchased Statkraft's 50% stake in an offshore UK wind project.

French airport operator ADP on Wednesday announced a 4.7% rise in passenger traffic for September versus a year ago to reach 9.0m.