European stock markets diverge as traders track Brexit, Spain
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LONDON: European stock markets were mixed on Monday (Oct 9) as investors were looking for fresh clues on Brexit talks from a speech by embattled British Prime Minister Theresa May.The euro meanwhile held firm in the face of mounting pressure against Catalonia's push to break away from Spain.In Britain, May was expected to tell the European Union that "the ball is in their court", as her divided government resumed Brexit negotiations in Brussels.But the European Commission roundly rejected May's assertion that it was up to Brussels to take the initiative to advance the stalled talks, amid fears that her domestic political woes were threatening the negotiations.The pound was in recovery mode Monday, making good some of the heavy losses it had sustained last week on rumours of a plot to oust May as Conservative party leader amid bitter divisions over how the UK should plan its EU departure."The FTSE 100 came under pressure as sterling rallied on the back of the speculation that Theresa May will reshuffle her cabinet in order to reassert her authority on the party," said market analyst David Madden at CMC Markets UK.
Meanwhile, Madrid stocks pushed higher although Catalan leader Carles Puigdemont could still declare the region independent as promised, possibly by Tuesday."The IBEX 35 has bounced back today as tensions have cooled in comparison with early last week, but the market is regaining the ground it lost at the start of the month," said Madden.The DAX 30 in Frankfurt struck a new record high after industrial output grew faster than expected in August, just short of breaching the 13,000 points level.In Asia meanwhile, most stock markets started the week on a positive note, with Shanghai returning from a week-long break with healthy gains as traders looked past a surprise drop in US jobs.
GEOPOLITICAL TENSIONSNevertheless, geopolitical tensions returned with another feared North Korea long-range missile test reportedly in the planning and US President Donald Trump suggesting that talking to Kim Jong-Un's regime was a waste of time and "only one thing will work", although he did not say what that "thing" was."Whether it's fears of another North Korean missile, Catalan secession, a US-Turkey visa spat, German coalition talks or Brexit ... there's plenty to keep markets amused," said Accendo Markets analyst, Michael van Dulken.With the Columbus Day holiday in the United States, trading on Wall Street was expected remain quiet, van Dulken said. The Dow was drifting higher approaching midday.At the end of last week, the Dow and S&P 500 had retreated from earlier record highs as data showed the US economy lost 33,000 posts in September - the first drop since 2010.Analysts noted that the drop was not as steep as expected and pointed to improving wage growth and a further dip in the overall unemployment rate, suggesting that the data were likely distorted by factors related to the recent hurricanes that hit Florida and Texas.Meanwhile on Monday, Shanghai ended higher as investors returned from the week-long Golden Week celebrations and reacted for the first time to the Chinese central bank's decision to cut the amount of cash banks must hold in reserve as part of a push to help small businesses.Hong Kong retreated on profit-taking after ending Friday at a 10-year high. Tokyo, Seoul and Taipei were closed for public holidays.Key figures around 1530 GMT:London - FTSE 100: DOWN 0.2 per cent at 7,507.89 points (close)
Frankfurt - DAX 30: UP 0.2 per cent at 12,976.40 (close)
Paris - CAC 40: UP 0.1 per cent at 5,635.83 (close)
Madrid - IBEX 35: UP 0.5 per cent at 10,236.00
EURO STOXX 50: UP 0.2 per cent at 3,610.21
New York - DOW: UP 0.04 per cent at 22,782.84Shanghai - Composite: UP 0.8 per cent at 3,374.38 (close)
Hong Kong - Hang Seng: DOWN 0.5 per cent at 28,326.59 (close)
Tokyo - Nikkei 225: Closed for public holidayEuro/dollar: UP at US$1.1739 from US$1.1736 at 2100 GMT on Friday
Pound/dollar: UP at US$1.3128 from US$1.3069
Dollar/yen: FLAT at 112.65 yenOil - Brent North Sea: DOWN one cent at US$55.61 per barrel
Oil - West Texas Intermediate: UP 10 cents at US$49.39.