Spanish courts suspend Monday's Catalan parliamentary session

Spain's constitutional court has ordered the suspension of a regional parliamentary session in Catalonia on Monday as expectations grow that the body will declare independence next week.

Officials in the region pressed on with their plans for an independence vote on Sunday despite the same court ruling it as illegal.

Around 900 people were injured in clashes between police and voters on Sunday, after the government enforced the court’s decision.

Catalan president Carles Puigdemont criticised Spanish monarch King Felipe VI's attack on authorities in the region for the organisation of Sunday’s referendum.

As tensions between Madrid and Barcelona continued to rise, Puigdemont said Catalonia would declare independence in the coming days, without giving a specific date.

Around 900 people were injured in clashes between police and voters on Sunday

Spain's biggest stock index, the Ibex 35, suffering its biggest daily loss on Wednesday since last year’s Brexit referendum vote. Catalan banks Sabadell and Caixabank both fell over 5% as investors fear the withdrawal of deposits from the institutions.

“The king endorses the discourse and policies of the government of Rajoy, which have been catastrophic for Catalonia and deliberately ignore the millions of Catalans who do not think like them,” he said.

“Your decision yesterday disappointed many people in Catalonia,” Puigdemont added.

In a televised address on Tuesday, Felipe VI added fuel to the fire by completely condemning Catalan officials for carrying out the vote and not suggesting any form of mediation between the two sides. The country is currently experiencing one of its most serious political crises since the Franco era.

MARKETS ON EDGE

Investors are maintaining a keen eye on events in Catalonia, which are currently on edge in anticipation of Puigdemont making the unilateral announcement of independence.

“Traders are mindful of the fact that the announcement could hit the newswire anytime. This datum is triggering the sell-off in the market. As long as the guessing game carries on, we expect the Spanish equity market to remain under pressure,” said Naeem Aslam from Think Markets.

Jasper Lawler from London Capital Group asserted that some form of mediation talks between the central government and Catalan representatives was the most likely next step.

“Puigdemont has requested mediated talks with Madrid. This was likely the aim all along. We think Catalonia was using the referendum as a bargaining chip with Madrid but that the violent police response on Election Day forced them into a more aggressive position,” Lawler said.