By Sara Sjolin and Victor Reklaitis, MarketWatch
But German stocks achieve a fresh all-time high
European markets closed mostly lower Wednesday, with Spanish stocks leading the way south after Catalan officials reiterated their pledge to declare independence in coming days.
The Stoxx Europe 600 index fell 0.1% to end at 390.40, breaking a nine-day winning streak, the benchmark's longest since July 2015.
"Spanish politics is acting as a drag on the positive read-across from the record highs on Wall Street. The resolve of regional officials in Catalonia to announce independence from Spain has caught markets off guard," said Jasper Lawler, head of research at London Capital Group, in a note.
"Given their turbulent history and strong ties to the economy, short sellers will target Spanish banks during any political instability involving Catalonia," he added.
The IBEX 35 index finished down 2.9% at 9,964.90, suffering its biggest daily drop in more than a year and ending at a level last seen in March .
Shares of Banco de Sabadell SA (>> Banco de Sabadell) fell 5.7%, CaixaBank SA (>> CaixaBank) lost 5%, Bankia SA (>> Bankia SA) gave up 3.7% and BBVA SA (>> Banco Bilbao Vizcaya Argentaria S.A.) (>> Banco Bilbao Vizcaya Argentaria S.A.) slid 3.6%.
Catalonia's secessionist leader Carles Puigdemont told the BBC the region will declare its independence in a matter of days, a move that would defy the central government in Madrid that has declared Sunday's referendum illegal. Around 90% of voters supported the idea of breaking away from Spain, but less than half of Catalonia's population voted in the referendum.
More than 800 people were hurt as the ballot descended into violence and chaos on Sunday.
Spain's King Felipe VI on Tuesday, in a rare address, accused the secessionists of undermining harmony and called the situation "extremely serious."
Other indexes: Germany's DAX 30 index added 0.5% to finish at 12,970.52, nabbing a fresh record close. There was no trading in German stocks on Tuesday in observance of German Unity Day.
France's CAC 40 index closed off by 0.1% at 5,362.23 on Wednesday, while the U.K.'s FTSE 100 index slipped less than 0.1% to 7,467.58.
The London benchmark turned lower as the pound rose after the U.K.'s services purchasing managers index came in better than expected. Sterling recently bought $1.3271, up from $1.3239 late Tuesday in New York.
The euro rose to $1.1762, compared with $1.1746 on Tuesday. The final composite PMI for the eurozone in September was confirmed at 56.7 (https://www.markiteconomics.com/Survey/PressRelease.mvc/fb1badcad80a43729a8748a3c6277cf3), up from 55.7 in August.
Retail sales in the eurozone fell 0.5% in August, missing forecasts of a rise.
Stock movers: German car makers were among biggest advancers, after late Tuesday reporting upbeat sales figures for the U.S. market. Shares of Bayerische Motoren Werke AG (>> Bayerische Motoren Werke) (>> Bayer) rose 2.7%, Volkswagen AG (>> Volkswagen AG) (>> Volkswagen AG) climbed 2.3%, and Daimler AG (>> Daimler) (>> Daimler) gained 1.2%.
Also in Frankfurt, shares of Thyssenkrupp AG (>> ThyssenKrupp) fell 2.4% after the industrial conglomerate said it plans to bundle its global forging activities into a new business unit.