Europe close: Stocks brush-off uncertainty around Catalan elections
European stocks finished higher as voting began in regional elections in the Spanish region of Catalonia with investors also reacting to fresh gains on Wall Street after the passing of tax reforms in America.
By the closing bell, the Stoxx 600 was 0.60% or 2.32 points ahead to 390.69, while the German Dax was climbing 0.31% or 40.57 points to 13,109.74 and the FTSE Mibtel added 0.59% or 130.60 points to 22,240.25.
Somewhat ironically, Spain's Ibex 35 outperformed, adding 0.95% or 96.90 points to 10,304.60.
In the background, euro was was relatively steady, edging down 0.1% against the dollar to 1.1862.
Looking at the Catalonian regional parliament elections, while some hope these polls could mark the end of what has been a tumultuous political time in Spain, it is unlikely to be so straightforward.
"The topic of independence is a very divisive issue in Catalonia and it remains quite evenly split between those wanting it and those not," said analyst Craig Erlam at Oanda.
"There's a good chance that this election will produce a hung parliament which will far from resolve the crisis and even a small majority for independence parties will be unlikely to see them get their wishes."
David Madden at CMC Markets noted that polls were pointing to a hung parliament, which was keeping the Spanish market in a holding pattern, "but should the pro-independence party gain a majority a sell-off is likely."
Elsewhere in Europe, in Germany, Angela Merkel’s CDU/CSU bloc and former coalition partners the Social Democratic Party overnight put out a joint statement noting talks about forming a government will begin on 7 January, with the aim of reaching a preliminary agreement by 12 January.
It was unclear whether the talks will focus on a grand coalition or a minority led government, although party officials noted "good discussions in an atmosphere of trust."
On the US tax cuts, the yield curve steepened as bond investors reacted amid concerns that the $1.5trn tax cuts will lead the Federal Reserve to raise interest rates faster, amid parallel concerns about potential mushrooming of government borrowing that will increase the supply of bonds.
Meanwhile, on the economic front, France's INSEE's business climate index edged up by one point in December to reach 112.0 and beat the consensus forecast of 111.0. INSEE said the business climate increased mostly strongly in the construction sector to a level not seen since September 2008, while services reached highs not seen since mid-2011.
Later in the day, Eurostat reported that its consumer confidence gauge for the euro area in December climbed by 0.5 points to 0.5 (consensus: 0.2).