European stocks hold firm as banks and Spanish shares fall

European shares edged higher on Monday, though banks weighed and Madrid's bourse lagged peers as Catalonia's political crisis deepened. The pan-European STOXX 600 index ended the session 0.2 percent higher, while Spain's benchmark IBEX fell 0.6 percent, with banks including BBVA and Banco Santander, both down more than 1 percent, taking the 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 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 0.5 percent and heavyweights Deutsche Bank and Standard Chartered losing 1.2 percent and 0.6 percent respectively. Company results were also in focus, with Securitas among the top STOXX performers, up 3.6 percent after reporting third-quarter earnings.
A profit warning sent British car dealership chain Pendragon 18 percent 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 trading, with Britain's Spire Healthcare jumping more than 15 percent, its biggest one day rise, as it rejected a takeover approach by private hospitals operator Mediclinic International. Engineering group GKN was up more than 5 percent after a report said it was considering splitting into two listed companies.
French utility Engie added 2.1 percent after a financial newsletter reported it was in talks over the possible sale of its liquefied natural gas division to French oil group Total, which rose 0.3 percent. German consumer goods group Henkel was trading 0.6 percent lower after it said it was considering expanding its business in the United States via acquisitions. Dutch healthcare technology company Philips rose 1.1 percent after its core profits in the third quarter rose 12 percent to 532 million euros, as strong growth in China pushed comparable sales up 4 percent.