Spanish Markets And Euro Hit As Catalan Parliament Declares Independence

The independence motion was passed by the 135 assembly members with 70 votes in favour, 10 against and 2 unmarked, the assembly's speaker said.

Lawmakers from the People's Party, Ciudadanos and the Socialist Party left before the votes were cast, according to Reuters.

Spanish Prime Minister Mariano Rajoy called for "tranquility" from all Spaniards, stating law would be restored in the region.

In an address to the Senate, Rajoy said: "Exceptional measures should only be adopted when no other remedy is possible," according to Reuters.

"In my opinion there is no alternative. The only thing that can be done and should be done is to accept and comply with the law."

On the news, Spanish 10-year government bond yields widened by 5bps to 1.603% by mid-afternoon, while the Ibex 35 share index dropped 1.9% in afternoon trading and the euro fell 0.5% to $1.159

Shares in Spanish banks, which had already threatened to leave the area following previous threats from the regional government to declare independence, were particularly badly hit.

Banco Sabadell, which said it was relocating its headquarters to Alicante in order to "protect the interests of customers, shareholders and employees", fell 5.8% to €1.5 while CaixaBank shares fell 5.2% to €3.7.

Unrest began in Catalonia when Spanish police attempted to stop the independence referendum on 1 October in which hundreds were injured. However, over two million people managed to cast a vote, which was 90% in favour of independence.