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Markets take a hop despite Catalonia uncertainty
October 11, 2017
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LONDON: Stocks around the world rose on Tuesday, helped by record highs on Wall street although Europe traded cautiously and US Treasury yields fell as investors braced for a possible move by Catalonia to unilaterally declare independence from Spain.

While oil futures traded higher the dollar lost ground as the euro climbed to its highest point in a week after Germany’s trade data beat forecasts and on expectations the European Central Bank may consider scaling back asset purchases.

Madrid’s IBEX stocks index was 1 per cent lower due to Spain’s biggest political crisis since an attempted military coup in 1981. The FTSEurofirst 300 index of European stocks was down 0.2 per cent.

Catalonia’s secessionist leader Carles Puigdemont was due to address the region’s parliament in Barcelona later on Tuesday and could ask the assembly to vote on a unilateral declaration of independence from Madrid.

If Catalonia splits from Spain “that is going to create economic disruption, and that’s bad for the Spanish economy and the eurozone as a whole,” said Mary Ann Hurley, vice president in fixed income trading at D.A. Davidson in Seattle.

The three major Wall Street indexes scaled new records, helped by gains in energy stocks and in Wal-Mart on the back of the company’s $20 billion share buyback plan.

The Dow Jones Industrial Average rose 31.44 points, or 0.14 per cent, to 22,792.51, the S&P 500 gained 2.95 points, or 0.12 per cent, to 2,547.69 and the Nasdaq added 1.20 points, or 0.02 per cent, to 6,580.93 MSCI’s gauge of stocks across the globe gained 0.41 per cent, also hitting a record high.

The dollar index, which tracks the greenback against a basket of major currencies, fell for the third day in a row.

The dollar index fell 0.46 per cent, with the euro up 0.55 per cent to $1.1803.

On top of strong German export data, traders were also upbeat after one of the European Central Bank’s German policymakers called for an end to its stimulus.

Benchmark 10-year notes last rose 9 in price to yield 2.3356, from 2.368 per cent late on Monday.

The 30-year bond last rose 24 in price to yield 2.8673 per cent, from 2.906 per cent late on Monday.

In commodities, Brent oil prices pushed above $56 a barrel after top producer Saudi Arabia signalled it would trim its exports and as OPEC flagged ongoing efforts to try to restore the longer-term “balance” of the market.

US crude rose 2.46 per cent to $50.80 per barrel and Brent was last at $56.69, up 1.61 per cent on the day.

Gold prices also hit their highest in more than a week against the backdrop of a weaker dollar although expectations for another US interest rate hike capped gains. Spot gold added 0.6 to $1,291.12 an ounce.


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