UPDATE 1-European shares flat as banks weigh, Spain lags again

* STOXX 600 up 0.1 pct

* IBEX down 0.4 pct

* No contagion yet from Catalonia -CS

* Spire soars after rejects Mediclinic offer (Adds more stocks, quotes)

By Julien Ponthus and Helen Reid

LONDON, Oct 23 (Reuters) - European shares were flat on Monday with banks weighing and Madrid's bourse lagging its peers as Catalonia's political crisis deepened.

The pan-European STOXX 600 .STOXX was up 0.1 percent while Spain's benchmark IBEX .IBEX fell 0.5 percent, with banks - including BBVA BBVA.MC down 1.4 pct and Banco Santander SAN.MC down 1.3 percent - taking most points off the index.

"At this moment you don't have contagion from Spain to the broader European market. It's seen as a national and localised issue", said Pierre Bose, head of European equity strategy at Credit Suisse (SIX: CSGN ).

Madrid has urged Catalans to accept its decision to dismiss their secessionist leadership and to take control of the region, as the nation's biggest political crisis in decades enters a decisive week. shares fell across Europe, with the banking sector .SX7P down 0.4 percent and heavyweights Deutsche Bank DBKGn.DE and Standard Chartered STAN.L losing 1.2 percent each.

The subdued mood in Europe was in sharp contrast to Japan, where shares jumped on a weaker yen as an emphatic election win for Shinzo Abe's ruling bloc gave a green light for more policy stimulus. SECUb.ST was the top performer of the STOXX 600 with a 4.2 percent rise after third-quarter earnings. profit warning sent British car dealership chain Pendragon PDG.L 19 percent lower. number of profit warnings issued by British companies jumped to 75 in the third quarter, the biggest quarterly rise in almost six years as economic pressures weighed on retailers and support service companies, business services group EY said on Sunday. or speculation about mergers and acquisitions animated early deals, with Britain's Spire Healthcare SPI.L jumping 12.1 percent, set for its biggest one day rise as it rejected a takeover by private hospitals operator Mediclinic International MDCM.L . group GKN GKN.L was up about 3 percent, after a report said it was considering splitting into two listed companies. utility Engie ENGIE.PA added 0.3 percent after a financial newsletter reported it was in talks over the possible sale of its liquefied natural gas (LNG) division to French oil group Total TOTF.PA , which rose 0.1 percent. consumer goods group Henkel HNKG_p.DE was trading down 0.1 percent after it said it was considering expanding its business in the United States via acquisitions. healthcare technology company Philips PHG.AS was flat after its core profits in the third quarter rose 12 percent to 532 million euros, as strong growth in China pushed comparable sales up 4 percent. SPIRE