Spanish stocks slump after separatists win Catalonia election

Reuters People react to results in Catalonia’s regional elections at a gathering of the Catalan National Assembly in Barcelona, Spain

Spanish stocks led European markets lower on Friday, after parliamentary elections in Catalonia handed a win to the separatist movement, rekindling fears of the re-emergence of tensions in Spain. The euro and Spanish stocks came under pressure after the three Catalan separatists parties won a majority in regional parliamentary elections in Spain on Thursday. The result was a rebuff to the central government and Spanish Prime Minister Mariano Rajoy, as he had called for the elections in a bid to quash the secessionist move after a chaotic and illegal independence referendum in October. Following October’s vote, Rajoy’s government seized power of the Catalan region, dissolved its parliament and jailed its leaders. Ex-regional leader Carles Puigdemont fled to Belgium where he’s been campaigning in exile. Together for Catalonia, the party led by Puigdemont, got the most votes among the pro-independence parties in Thursday’s election, while Rajoy’s Popular Party got the least votes. The election, which saw a high turnout, is likely to reopen the debate about independence for the region, and potentially bring about fresh turmoil for Spain. “This result will not be welcomed by the Madrid government who were hoping this snap election would reduce the calls for independence, and today’s result will keep the issues on the table,” said David Madden, market analyst at CMC Markets U.K. “The results of the Catalan regional election are a wake-up call for Spanish Prime Minister Mariano Rajoy. He suffered two major defeats yesterday,” said Carsten Hesse, European economist at Berenberg, in a note.