Summary:
- Catalans stall independence push with leaders divided
- SPA35 higher by more than 2% on the day
- Market seeking to recoup large recent losses
The developments surrounding the Catalan independence vote last Sunday have caused large moves in the Spanish stock market this week, with Wednesday marking the largest single-day decline since the Brexit vote. The market dropped further this morning but has been making steady progress in recovering some of the declines since the first hour of trade and has recently spiked higher following some seemingly positive news. .
Bloomberg is reporting that Catalan leaders are divided on how best to proceed from here, after the Spanish government and King declared the referendum unconstitutional and illegal. According to two people familiar with the plan, Catalan separatists are trying to find a way to put off a definitive declaration of independence to create space for a negotiated settlement with Spain.
The news has seen an immediate rise in the SPA35, with the market surging more than 100 points in the 30 minutes following the announcement. Source: xStation
As we pointed out earlier, this morning’s decline coincided with the 50% retracement of the rally seen since last December. Should price move above, and close higher than, Wednesday’s high of 10246 then a bullish engulfing candle will be printed on D1. This could be seen as a positive sign that the recent declines are over and that further upside lies ahead.
The SPA35 has bounced from the 50% retracement of the rally which started last December. Source: xStation