-Spain sells more debt than targeted
-Spanish 10 year bond yields rise by 6 basis points to 5.75%
-Large drop in French manufacturing PMI
-Spanish doubts continue to weigh on sentiment

FTSE-100: -0.58%
Dax-30: -0.28%
Cac-40: -0.56%
FTSE-Mibtel 30: -1.33%
Ibex 35: -1.06%
Stoxx 600: -0.17%

Equity benchmarks in the so-called core countries have come off their lows, although periphery indices are still registering losses. This following weak economic data out overnight in Japan and China and despite Wall Street having managed to close in the blue last night.

There also continues to be quite a bit of "market chatter" regarding the course of action which Spain will take so as to tackle its financial problems. The most recent line of speculation in this regard concerns the possibility that the country will employ what funds are left over from its bank bail-out to shore itself up, instead of asking Brussels (and Frankfurt) for a full-fledged bail-out.

Of interest, the country´s Prime Minister, Mariano Rajoy, is to meet today with the leader of the region of Catalonia, Artur Mas. Some observers believe that regional elections in Catalonia will be brought forward in a gambit to pressure Madrid into making concessions on the financing for regional governments. Mr. Mas is now publicly calling for secession, blaming what it considers to be excessive fiscal transfers to the central government as the main factor behind the region´s financial plight.

The Spanish Treasury has sold 4.8bn in medium and long-term debt this morning, ahead of the 4.5bn it had targeted; although demand for the former fell, it did rise for the latter.

Cyclicals lead losses



Deutsche Bank is close to signing a contract to sell unit BHF-Bank to private equity investor RHJ International, with an announcement likely to be made on Thursday, Reuters reports.

French car maker Peugeot may sell a 75% stake in its Gefco logistics division for 800 million euros.

Austrian telecoms operator Hutchison 3G may not be able to offer sufficient concessions to satisfy regulators considering its €1.3bn bid for France Telecom's Orange Austria, EU antitrust chief Joaquin Almunia has said.

From a sector stand-point the worst performers on the DJ Stoxx 600 are now: Basic resources (-1.47%), Automobiles (-1.24%) and Banks (-0.98%).



French manufacturing PMI, well below expectations



The Eurozone manufacturing sector purchasing managers index for the month of September has come in at 46 points, versus the 45.5 expected by the consensus.

The Dutch consumer confidence index for the month of September has come in at -29, versus -32 for the month before.

The French manufacturing sector purchasing managers index for the month of September has come in at 42.6, far below the previous month´s reading of 46.4.

The German manufacturing sector purchasing managers index for the month of September on the other hand rose to 47.3 points, after 44.7 in August (Consensus: 45.3).



Other asset classes also on the retreat



Front month Brent crude futures are falling by 0.259 dollars, to the 107.92 dollar mark in ICE trading.

The euro/dollar is now off by 0.78% to the 1.2940 dollar mark.



AB

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