European stock markets down amid the bond market turmoil, with Milan bringing up the rear. Wall Street up slightly
The BTP-Bund spread jumped to 118 points at the close, with the 10-year yield hitting its highest level since October 2023. On the Milan Stock Exchange, tech shares held up well following Micron’s record results. Brent crude halved its losses and returned to the $100 mark, whilst US WTI rose
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(Il Sole 24 Ore Radiocor) – A wave of selling during the first trading session of October on European stock markets, overwhelmed by the surge in bond yields, which is accompanied by persistent tensions over oil and the resulting global inflationary fears. Yields on government bonds have returned to levels not seen for decades, from Treasuries to British Gilts, with the Italian spread jumping to around 118 basis points. This has led to a slump in indices on both sides of the Atlantic, as analysts now anticipate a period of high interest rates lasting longer than expected, whilst there are no signs of a de-escalation in the geopolitical crisis in the Middle East that might mitigate the ongoing energy shock. Even Micron’s better-than-expected revenues and forecasts did little to help; for a moment, it seemed as though the company might be able to prop up the indices, although the European tech sector held up until the end (despite the fall in Nasdaq). As a result, Milan’s FTSE MIB was the worst performer in Europe, slipping further towards the close to end the day down 1.9 per cent.
Wall Street closes slightly higher
Wall Street also fell back, after an initial rise, weighed down by the turmoil surrounding US Treasury yields and rising oil prices.
Wall Street closed slightly higher on a day characterised by volatility linked to movements in Treasuries and oil prices. The Dow Jones index ended the session up 0.04% at 50,927 points, whilst the S&P500 rose by 0.25% to 7,670 points, whilst the Nasdaq recorded a +0.04% gain to 26,871 points.
Micron has reported exceptional profits, with turnover quadrupling in the last quarter. However, these results are not enough to boost other companies linked to artificial intelligence: Nvidia Corp , AMD and Broadcom are quickly losing their initial gains and trading below par. Also in the red is Alphabet is also in the red, after unveiling its latest artificial intelligence model, Gemini 4 Argon. The new model offers improvements in terms of cyber security, programming and complex professional tasks, Alphabet said. Meanwhile, yields on 10-year US Treasury bonds stood close to their highest levels since 2002, as did those on 30-year bonds.
Banks under fire in Milan; Fincantieri and tech firms hold up
On the Milan Stock Exchange, as in the rest of Europe, selling pressure targeted the major banks, such as Mediolanum (-3.8 per cent), Mediobanca (-3.7 per cent), UniCredit (-3.6 per cent), Banco BPM (-3.5 per cent) and Intesa Sanpaolo (-3.5 per cent). Almost all stocks on the main index lost ground, from insurance to the automotive sector, via telecoms and utilities. Among the few to escape the downturn were Fincantieri (+3 per cent), buoyed by expectations regarding European defence spending, ST (+0.8 per cent) and, among oil and gas companies, Tenaris (+0.7 per cent) and Eni (+0.4 per cent). Outside the FTSE MIB, a number of ‘challenger banks’ took a hit, such as BFF (-11%), along with, amongst others, Banco Desio (-7.2%) and Banca Profilo (-5.6%). Energy fell by 50 per cent following its application for a negotiated settlement to protect itself from creditors.
