SPAIN IN CRISIS: Stock market crash over Catalonia chaos - ‘WORST outcome for Madrid’

Spain’s government borrowing costs also surged, while
the euro drifted lower against the dollar as investors
weighed fallout from the violent police crackdown on
Catalans on Sunday.
This morning local officials announced 90 per cent of
those who voted in the contested referendum on
Sunday, which Madrid deemed illegal, called for
independence from Spain.
Around 2.26 million people took part in the ballot,
representing around 42.3 per cent of Catalonia’s 5.34
million voters.
Catalonia referendum: Spain’s stock market came
under pressure after Catalans voted for independence
EU faces angry
barrage of questions
as it REFUSES to
criticise Spain
Catalan referendum
puts Euro under
pressure
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The northeastern region of Spain accounts for a fifth
of the country’s economy and its tax returns are
crucial to the national budget.
Many analysts expect the crisis to be resolved with
more autonomy, but some said the uncertainty could
impact the Spanish government’s economic growth
and soil Prime Minister Mariano Rajoy’s reputation.
Federico Santi, an analyst at Eurasia Group in London,
said the vote was “probably the worst outcome for
Madrid”.
Scenes at the Catalan
independence referendum
Sun, October 1, 2017
Scenes at the Catalan independence referendum
PLAY
People clash with Spanish Guardia Civil [AFP/Getty
Images]
AFP/GETTY IMAGES 1 of 15
He
added:
“There
was
violence but they didn't stop the vote either and public
opinion in Catalonia is more polarised.
"It is clear that risks to government stability are
increasing."
Spain’s mainstream political parties have largely
backed Mr Rajoy’s opposition to the Catalonia
independence referendum, but the prime minister
faces criticism over his handling of the issue.
Nearly 850 people were injured when police clashed
with independence protesters on Sunday as officers in
riot gear closed polling stations and used batons to
stop voters from reaching the ballot boxes.
Catalonia referendum: Spain’s government borrowing
costs surged as investors weighed fallout
Meanwhile, Spanish authorities denied accusations of
police brutality and claimed that no referendum had
taken place.
Following the vote, Spanish government bond yields
rose 7 basis points to 1.68 per cent, while the cost of
insuring exposure to Spanish debt via credit default
swaps rose to a near one-month high.
S&P Global affirmed Spain’s BBB+ credit rating on
Friday, but said tensions between the central
government and Catalan authorities could impact
business confidence and investment.
Spain’s benchmark IBEX equity index dropped around
1.3 per cent as banks Banco de Sabadell and
Caixabank, both based in Catalonia, dropped 5.3 per
cent and 4.4 per cent respectively.

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