Oil at $100 a barrel and bond yields send stock markets into the red; Eni surges in Milan
According to experts, the Governing Council of the European Central Bank is set to announce a 25 basis point rise in interest rates. Milan is at its lowest level since the end of July. The yen is at its highest level since February.
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(Il Sole 24 Ore Radiocor) - The latest rises in the price of oil, with Brent back at $100 a barrel, and gas, which is trading at €78 per megawatt-hour in Amsterdam, are causing concern amongst European stock markets, which are awaiting the outcome of the ECB Governing Council meeting on Thursday. The market expects a 25 basis point rise in interest rates, but traders will be closely assessing any indications regarding the central bank’s next moves, whilst the new tit-for-tat attacks on energy infrastructure in the Persian Gulf between the United States and Iran risk keeping price pressures high.
The FTSE MIB on the Milan Stock Exchange has been hit hard by selling, in line with other major European indices. The Milan stock exchange has fallen to its lowest level since 30 July.
Meanwhile, on the subject of monetary policy, the countdown has also begun for the meeting of the FOMC – the Federal Reserve’s operational arm – scheduled for next week. According to CME FedWatch data, the market considers a 60 per cent probability of a quarter-point rise in the US interest rate.
Wall Street falls as oil prices rally
Wall Street is down, following yesterday’s poor performance, due to the continued rise in oil prices. Prices have risen as a result of escalating tensions between the United States and Iran, which are fuelling fears of further disruptions to energy supplies in the Middle East. No major economic data or corporate quarterly results are due today. Over the course of the week, market participants will be monitoring inflation figures, which will influence the Federal Reserve’s forthcoming decisions on interest rates.
Buying in oil stocks; banks weak
Among the leading stocks on the Milan stock exchange, high oil prices continue to bolster energy shares, led by Eni . Attention remains focused on the banking sector, which is generally down, on the eve of the AGM of Intesa Sanpaolo which is due to give the green light to the capital operation underpinning the takeover bid for Banca Monte Paschi Siena . As for the Siena-based bank, on Tuesday, as expected, the non-executive directors Gianluca Brancadoro and Alessandro Caltagirone were co-opted onto the board.
