Madrid stocks stage modest rebound amid Catalan crisis

LONDON, Oct 5 (AFP): The Madrid stock market rebounded somewhat on Thursday as investor concerns eased over the Catalan independence crisis.

The Spanish capital's benchmark IBEX 35 shares index jumped 1.0 per cent in late morning deals, but failed to reverse the previous day's 3.0-per cent slump.

Trade was more muted elsewhere in Europe, with Frankfurt and Paris receding but London edging into positive territory.

The euro meanwhile struggled in the mid-$1.17 range -- having topped $1.20 just two weeks ago -- as Spain's Catalonia crisis drags on.

"The IBEX 35 has bounced back after suffering heavy losses," said CMC Markets UK analyst David Madden.

"The stand-off between Catalonia and Madrid is still ongoing, so today's positive move should not be viewed as a sign that the relations are improving."

Shares in Catalonia-based banks have been hit particularly hard in recent days, and Sabadell, Spain's fifth-biggest lender, said it will discuss Thursday whether to shift its registered headquarters out Catalonia due to leaders' threats to declare independence.

Madden added: "Madrid has warned Catalonia that direct rule may be imposed, and such a move is likely to stoke tensions even further."

The European Union urged dialogue to ease the standoff between separatists in the northeastern region and Madrid, but a regional government source said an independence declaration could come as early as Monday.

That follows the weekend's unofficial vote on breaking away, which has fanned uncertainty in one of the bloc's biggest economies.