Europe close: Shares finish off lows after dovish remarks from ECB's Praet
European stocks finished off their lows of the session after a top European Central Bank official flagged the need for continued "ample" monetary stimulus, although contrary to expectations no deal on forming a coalition deal in Italy was forthcoming in the afternoon.
Speaking at Market News International's Connect event, ECB chief economist Peter Praet described "inflation developments" as "subdued", adding that "an ample degree of monetary stimulus remains necessary."
His remarks saw the single currency come off its earlier highs to dip 0.06% to 1.1940 by the close of trading.
Earlier, another member of the ECB's Governing Council, Francois Villeroy de Galhau, had said Frankfurt was still likely to end its net asset purchases in September or in December, but added that in any case the matter was "not an existential question".
Against that backdrop, by the closing bell the benchmark Stoxx 600 was dipping by 0.21 points or 0.05% to 392.19, alongside a fall of 23.53 points or 0.18% to 12,977.71 for the German Dax, although the FTSE Mibtel ended higher, gaining 0.26% or 62.13 points to 24,221.47.
Also higher was the yield on 10-year Italian government bond, which gained six basis points to 1.93%, alongside a similar five point gain on that for similarly-dated German bunds to 0.61%.
In Spain, the Ibex 35 dipped 0.13% to 10,257.80 after regional lawmakers voted-in ardent nationalist Quim Torra as their new President, helping to exorcise the spectre of fresh regional elections.
Meanwhile, euro/dollar was 0.06% lower to 1.1940.
Acting as a backdrop, earlier on Monday all eyes were on the euro area periphery, with investors focused on ongoing coalition talks in Italy but also on events in Spain, where the regional Catalan assembly has voted-in its new President, possibly easing the way for approval of the 2018 state budget.
At the weekend, Italy's two main populist parties, the Five Star and the League, agreed on the framework for a coalition government, but promised to push through tax cuts, repeal pensions reforms, cancel a planned VAT increase in 2019 and grant a generous basic income for those unemployed which many observers had labelled "unrealistic".
Tellingly perhaps, one-on-one talks between leaders of the two parties and Italian President Sergio Mattarella on Monday concluded without an announcement - which some had expected - of who would be their candidate for the post of Prime Minister and as regards their economic programme.
Meanwhile, in Spain the regional assembly in Catalonia elected Quim Torra as their new leader.
Holger Schmieding at Berenberg believed that might allow the country's PM, Mariano Rajoy, to lift the freeze on the regional assembly's powers, which in turn was a precondition for the centre-right Basque nationalist PNV to back the state budget law for 2018, in exchange for multiple fiscal sweeteners for their region.
Nevertheless, given the reliance of many Spanish companies on the state, delays in approving the national budget, as had occurred the year before, could carry with it a heavy price in terms of lost economic growth.
From a sector standpoint, shares of insurers were the main drag on markets, with the Stoxx 600's sector gauge retreating 0.59% to stand at 295.06. Banks on the other hand managed to finish higher, adding 0.51% at 179.88.
No major economic releases were scheduled for Monday in the euro area.