Investors sold Spanish stocks and government bonds on Friday afternoon, after Catalonia’s regional parliament declared independence from Spain.

The Ibex 35 index of the country’s largest companies was down 1.9 per cent in afternoon trade, with all but two of its constituents falling.

Banks based in Catalonia were among the biggest fallers, with Banco de Sabadell down 6 per cent and CaixaBank down 4.6 per cent. The Madrid-listed stock of IAG, the Anglo-Spanish airline, was the biggest single faller, down by over 6 per cent.

Shares in the company, which owns Iberia and British Airways, had already slipped this morning after it reported disappointing third-quarter results, but they dropped further after the independence vote.

Investors also sold Spain’s government bonds, sending yields on the country’s benchmark 10-year debt up by 5 basis points to 1.603 per cent. Yields rise when prices fall.

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