-Chinese-Japan tensions are front and centre
-Spanish yields back-off slightly after bond auction
-ZEW index ahead of forecasts

FTSE-100: -0.58%
Dax-30: -0.63%
Cac-40: -0.77%
FTSE-Mibtel 30: -1.63%
Ibex 35: -1.52%
Stoxx 600: -0.43%

Geopolitical tensions (in the trade sphere included), elections in the US and China, economic slow-down fears, equity valuation worries, profit-taking, inflation-expectations jumping Stateside and the financial crisis in Spain are some of the factors influencing stocks of late.

Given all of the above it should perhaps come as little surprise that equity benchmarks now seem to be consolidating recent gains, even if for the moment one must be careful not to exaggerate the magnitude of any of the above factors.

Helping stocks cut their losses today, however, were the results of the Spanish Treasury´s latest short-term debt auction, which saw it place a higher than expected €4.6bn in 12 and 18 month debt, at moderately lower rates.

Also on the positive side of things, the Mediterranean country will consider seeking a bailout if the conditions imposed are acceptable, Spain´s Deputy Prime Minister, Soraya Saenz de Santamaria, has said

With the opposite implications, Spanish banks´ loan defaults rose further, to 9.86% in July versus 9.65% in June, to a total of €169.3bn, according to the latest data made available by the Bank of Spain.

Acting as a backdrop perhaps, the European Central Bank´s (ECB) Luc Coene was cited this morning as having said that a renewed rise in debt yields may still force the country to ask for help.

Car sales dropped by over 8% in August



Akzo Nobel is falling sharply after it announced that its Chief Executive will be taking "sick leave."

European car registrations fell 8.5% to 722,483 vehicles in August, from 789,458 a year earlier, the Brussels-based European Automobile Manufacturers' Association said. In the year to date sales have decreased by 6.6% to 8.59m cars.

From a sector stand-off the worst performance is now to be seen in the following industrial groups: Automobiles (-2.11%), Banks (-1.93%) and Insurance stocks (-1.43%).



Slightly better than expected economic data



The ZEW Institute´s economic confidence index for the month of September rose by 7.3 points to the -18.2 point mark (Consensus: -20).

"The negative value of the indicator shows that the financial market experts still expect the German economy to lose momentum over the next six months. However, the end of the downward trend in September also reveals that the weakening of the economy will be rather moderate according to the financial market experts' assessment," the research institute has explained.



Other asset classes putting in mixed performances



The euro/dollar is moving lower by 0.35% at the moment, to the 1.3070 dollar mark.

Front month Brent crude futures are rising by 0.282 dollars, to the 113.47 dollar mark on the ICE.



AB

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