Europe close: Spanish stocks slip in light trading as investors eye new economic proposals

Stocks on the Continent were little changed mostly in a quiet holiday-shortened session, although some investors got their first chance to react to Spain's government coalition partners' economic programme, which was unveiled the night before.

By the end of trading, the Stoxx 600 had drifted 0.12% lower to 415.65, alongside a dip of 0.07% for the French Cac-40 to 5,978.06 and a 0.66% fall in Spain's Ibex 35 to 9,549.20.

In parallel, euro/dollar was 0.29% higher to 1.12308 and front month Brent crude oil futures were down by 0.82% to $66.12 a barrel on the ICE.

The Frankfurt and Milan bourses were closed for trading on Tuesday and government bond markets were shut.

On Monday evening, Spain's Socialists (PSOE) and far-left Podemos, which were set to form a minority coalition government in Madrid, unveiled plans to roll-back some key elements of the previous government's labour market reforms, alongside higher taxes for the most affluent.

Nonetheless, given their parliamentary minority, it remained very much to be seen if the coalition would finally manage to push through all of its economic agenda - or at what price.

And although it did not attract a lot of attention, their programme also included a tax on financial transactions and the so-called 'Google tax' for technology companies, although their final approval was expected to depend on whether other European countries chose to follow along.

Reports indicated that PSOE and Podemos had obtained the support of Catalan nationalist party ERC who would abstain, allowing the former two parties to form a minority government, likely from 7 January.

Later in the session, in the States, two closely-followed home price indices from the Federal Housing Financing Agency and from Standard and Poor's were set to be published at 1400 GMT, followed by the Conference Board's monthly consumer confidence gauge at 1500 GMT.

CAC 40 - Risers

Schneider Electric (SU) 92.99 +1.58%

Sodexo (SW) 106.40 +0.81%

Essilorluxottica (EL) 135.98 +0.80%

Michelin (ML) 108.88 +0.76%

ST Microelectronics (STM) 24.14 +0.65%

L'Oreal (OR) 264.89 +0.64%

Bouygues (EN) 38.00 +0.61%

Total (FP) 49.45 +0.53%

BNP Paribas (BNP) 52.96 +0.44%

Safran (SAF) 137.48 +0.28%

CAC 40 - Fallers

Capgemini (CAP) 108.89 -1.27%

Peugeot (UG) 21.31 -1.22%

Valeo (FR) 31.50 -1.04%

Dassault Systemes (DSY) 146.48 -0.83%

Pernod Ricard (RI) 159.97 -0.82%

Publicis Groupe Sa (PUB) 40.39 -0.75%

Veolia Environnement (VIE) 23.81 -0.71%

ENGIE (ENGI) 14.41 -0.69%

Atos (ATO) 74.34 -0.59%

Renault (RNO) 42.36 -0.56%