LONDON, Sept 25 (Reuters) - European shares edged down on Monday as investors took a cautious view of the upcoming coalition tussle in Germany following elections in which Chancellor Angela Merkel secured a fourth term but saw her party weakened by a surge in support for the far-right.
The reaction on stock markets was more muted relative to currencies where the euro took a hit though most regional benchmarks were flat to lower as market players took the view that a coalition government in Germany could dent some hopes for stronger euro zone integration going forward.
The pan-European STOXX 600 was little changed while euro zone bluechips were down 0.1 percent. Germany's DAX was also down 0.1 percent.
Spain's IBEX continued to lag its peers, and was off 0.6 percent in early trades. The mounting political crisis in Spain over Catalonia's campaign for independence, dragged stocks sharply lower has week, intensified over the weekend.
Broadly, financials were the biggest drag on European stocks on the day while healthcare, energy and industrials helped offset those losses. (Reporting by Julien Ponthus, Editing by Vikram Subhedar)