Europe open: Stocks start on a mixed note, Spain still a sore spot

Stocks have started the morning in a mixed fashion, with the immediate market spotlight still on events in Spain while investors wait on the outcome of the European Central Bank's policy meeting on Thursday.

Against that backdrop, as of 0848 BST the benchmark Stoxx 600 was dipping 0.01% to 390.68, alongside a gain of 0.15% to 22,411.42 on the FTSE Mibtel and a dip of 0.07% to 12,990.96 in the German Dax.

Overnight, reports surfaced in the Spanish-language Catalan press that the regional president Carles Puigdemont would travel to Madrid to argue against any move to intervene or freeze autonomy in his region. Nonetheless, tensions were running high with Puigdemont reportedly accusing Madrid during the evening of wanting to "humilliate" Catalonia.

More specifically, it was being argued that the central government was trying to make it impossible for him to travel down from Barcelona by scheduling a Spanish Senate hearing on whether to allow the government to trigger Article 155 on the same day as a meeting in the Catalan regional assembly. However, according to El Pais the spokesman for the Spanish Senate had announced the date of the Madrid hearings before officials in Catalonia had set the date for their own.

Then, on Monday morning, according to La Vanguardia, which cited remarks made to the national radio broadcaster RNE, Spain's Justice Minister said that it would not suffice for Puigdemont to call elections in order for him to avoid triggering Article 155 of the country's constitution, which would pave the way for temporarily suspending the region's autonomous powers.

"The return of fractious politics across Europe after the surprise results in Austria and the Czech Republic, along with the complete mishandling of events in Catalonia by the Spanish government appears to have uncorked a problem that is likely to prove to be extremely difficult to resolve," said Michael Hewson, chief market analyst at CMC Markets UK.

According to other analysts, markets were in a bit of holding pattern ahead of the European Central Bank's policy meeting on Thursday, although for some observers substantial information regarding rate-setters deliberations had already been 'leaked' so the hurdle for surprises was now quite high.

On the economic front, IHS Markit's composite euro area manufacturing sector purchasing managers' index fell from a reading of 56.7 in September to 55.9 for October (consensus: 56.5).

Still on the economic calendar for later, the ECB was set to relase the results of its Eurozone bank lending survey for the third quarter of 2017.

Policymakers at the National bank of Hungary were also set to meet to decide on interest rates.

In corporate news, stock in Unicredit was slightly lower after the Italian lender mistakenly released its third quarter figures two weeks ahead of schedule, posting a 5.7% drop in net interest income to €2.5bn.

Sales at German sportswear manufacturer Puma jumped 17% to €1.122m over the latest three month period, alongside a 230bp increase in gross margins, led the company to raise its full-year sales and operating profit forecasts.