Spanish stocks sag in aftermath of regional elections
Spanish stocks began the morning lower as traders in Madrid reacted to the stiff punishment inflicted by the country's voters on the ruling centre-right People's Party (PP) in the wake of Sunday's regional and municipal elections.
As of 09:05 the yield on the benchmark Spanish 10-year Treasury note was higher by one basis point to 1.79%.
In the opinion of analysts at Barclays, the most important take-away from this weekend’s regional and municipal elections in Spain "is what we will learn in the coming days/weeks from the behaviour of the four main parties (PP, PSOE, Podemos and Ciudadanos), as the results delivered few absolute majorities."
Complex coalition talks lie ahead, Barclays added.
In a research note dated on 22 May, the broker highlighted the importance of regional governments given Spain´s highly decentralised power structures. Over 50% of public sector expenditures are decided upon by regional parliaments.
Read more: Full coverage of the Spanish lcoal and regional elections 2015
"Spain's political landscape is now more fragmented, with anti-establishment Ciudadanos and Podemos gaining ground all across the country," chimed in analysts at Unicredit.
The country's Ibex 35 equity benchmark was down 1.38% to 11,394.40 points.
Milan´s FTSE-Mib was off by 1.87% to reach 23,341.93.
Euro/dollar edged lower by 0.10% to reach 1.0967.
UK, US and German equity markets were all closed for trading, with the lower trading volumes and hence higher volatility which that entailed.
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