European shares flat as banks weigh, Spain lags again

European shares were flat on Monday with banks weighing and Madrid's bourse lagging its peers as Catalonia's political crisis deepened.

The pan-European STOXX 600 was up 0.1 per cent, while Spain's benchmark IBEX fell 0.5 per cent, with banks - including BBVA down 1.4 per cent and Banco Santander down 1.3 per cent - taking most points off the index.

“At this moment you don't have contagion from Spain to the broader European market. It's seen as a national and localised issue", said Pierre Bose, head of European equity strategy at Credit Suisse.

Madrid has urged Catalans to accept its decision to dismiss their secessionist leadership and to take control of the region, as the nation's biggest political crisis in decades enters a decisive week.

Financial shares fell across Europe, with the banking sector down 0.4 per cent and heavyweights Deutsche Bank and Standard Chartered losing 1.2 per cent each.

Abe's election win

The subdued mood in Europe was in sharp contrast to Japan, where shares jumped on a weaker yen as an emphatic election win for Shinzo Abe's ruling bloc gave a green light for more policy stimulus.

Securitas was the top performer of the STOXX 600 with a 4.2 per cent rise after third-quarter earnings. A profit warning sent British car dealership chain Pendragon 19 per cent lower.

The number of profit warnings issued by British companies jumped to 75 in the third quarter, the biggest quarterly rise in almost six years as economic pressures weighed on retailers and support service companies, business services group EY said on Sunday.

Reports or speculation about mergers and acquisitions animated early deals, with Britain's Spire Healthcare jumping 12.1 per cent, set for its biggest one day rise as it rejected a takeover by private hospitals operator Mediclinic International.

Engineering group GKN was up about 3 per cent, after a report said it was considering splitting into two listed companies.

French utility Engie added 0.3 per cent after a financial newsletter reported it was in talks over the possible sale of its liquefied natural gas (LNG) division to French oil group Total , which rose 0.1 per cent.

German consumer goods group Henkel was trading down 0.1 per cent after it said it was considering expanding its business in the United States via acquisitions.

Dutch healthcare technology company Philips was flat after its core profits in the third quarter rose 12 per cent to 532 million euros, as strong growth in China pushed comparable sales up 4 per cent.

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