October 10, 2017 / 7:38 AM / 9 days ago

European bourses brace for crucial Catalan meeting after close

The German share price index, DAX board, is seen at the stock exchange in Frankfurt, Germany, October 9, 2017. REUTERS/Staff/Remote

LONDON (Reuters) - European bourses ended the day slightly lower on Tuesday as investors braced themselves for a possible unilateral declaration of independence at the Catalan parliament, which, it is anticipated, would lead to turmoil on Spanish markets and beyond.

Blue-chip indexes in Paris, Frankfurt and Milan closed flat, down 0.2 percent and 0.6 percent respectively, while Madrid's IBEX .IBEX lagged European peers with a loss of 0.9 percent.

The pan-European STOXX 600 was flat, helped by gains in London's FTSE 100 .FTSE, which ended the day up 0.4 percent with strong gains among domestic banks.

The British market “does offer a bit of sanctuary from the Catalan worries, which is doubtless weighing on European equities generally”, Chris Beauchamp, chief market analyst at IG told Reuters.

Financial shares in Spain suffered, with Banco Santander (SAN.MC) and Caixabank (CABK.MC) losing 3 and 2.2 percent.

On the positive side, a Goldman Sachs’ upgrade to “buy” boosted shares in Spanish wind turbine maker Siemens Gamesa (SGREN.MC) up 3.4 percent. Analysts at the bank said the firm was the best positioned to benefit from strong growth in wind power capacity.

Strong results from luxury group LVMH (LVMH.PA), which fired the starting gun on third-quarter results season, helped support stocks across the consumer goods sector.

Shares in the world’ biggest luxury group rose 2.3 percent after it beat sales and revenue forecasts in its third quarter, setting a high hurdle for European luxury peers to beat.

Luxury brands Christian Dior (DIOR.PA), Gucci owner Kering (PRTP.PA) rose 1.6 to 2.2 percent on the strong performance from the group Bernstein luxury analyst Mario Ortelli said is a “bellwether” for the industry.

Swiss fragrance and flavors maker Givaudan (GIVN.S) jumped 3.1 percent and touched a record high during the session after the firm stuck to its 2020 targets and reported third-quarter sales up 5.7 percent, beating analysts’ estimates.

“The strong Q3 growth gives Givaudan’s investment case a further positive sentiment boost, which comes after worries on the negative impact of natural raw material price increases (vanilla, citrus, onions) on profitability,” said Baader Helvea analysts.

Lufthansa (LHAG.DE) benefited from a wide-ranging agreement signed with its main pilots union. Its shares rose by 2.5 percent.

Provident Financial (PFG.L) was the worst performer of the index, falling 7.8 percent after being fined over a marketing campaign by its subsidiary Vanquis Bank.

Dassault Aviation (AVMD.PA) shares fell 2.2 percent, with traders citing comments from the CEO over delays to its Falcon 5X business jet.

BAE Systems (BAES.L) was down 0.3 percent after it said it would shed 2,000 jobs as new chief executive Charles Woodburn tries to shake up Britain’s biggest defense contractor in the face of dwindling orders for the Typhoon fighter jet.

Reporting by Helen Reid; Editing by Georgina Prodhan/Jeremy Gaunt

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