EU stock markets at a standstill amid sell-offs in tech shares and anticipation of the Fed’s decision. In Milan, the focus is on the banking crisis; the MPS board meeting is tomorrow

On the Milan stock exchange, all eyes are also on the key players in the banking crisis: According to an article in *Il Sole 24 Ore*, written by editor-in-chief Fabio Tamburini, the CEO of Banca Monte Paschi Siena, Luigi Lovaglio, may present two extraordinary transactions to the bank’s board of directors to counter the public takeover bid launched by Intesa Sanpaolo for Rocca Salimbeni. These consist of a public offer for Banco Bpm and one on Banca Generali. The MPS board of directors has been convened for tomorrow.

“In our view, the strategic alternatives under consideration involve a significantly higher level of complexity and execution risk than Intesa’s offer,” comment the analysts at Equita. In particular, MPS ‘would find itself having to manage, in parallel, the completion of the integration of Mediobanca and further large-scale transactions, significantly increasing the execution risk compared with that associated with Intesa’s bid’, all the more so given that “the success of these transactions would depend on the involvement and consent of key parties, including Crédit Agricole, Generali and MPS’s major shareholders, as well as on obtaining multiple regulatory approvals and overcoming the constraints arising from the passivity rule”.

Meanwhile, buy shares in Stellantis instead, which, along with the entire European automotive sector, is set to benefit from the potential trade agreement between the United States and Canada. US President Donald Trump has announced a three-day suspension of the entry into force of the 50 per cent tariffs that were due to come into effect today. Trump also announced via Truth Social that “Canada and the United States, subject to the finalisation of the documents, have reached an agreement”, whilst Canadian Prime Minister Mark Carney spoke of “substantial progress” in the negotiations and “much work still to be done” to reach an agreement.

In the bond market, yields on Eurozone government bonds fell only slightly following the sharp rise the previous day, in line with US and Japanese yields – particularly those on long-term bonds – due to concerns about inflation and interest rates in the light of the ongoing conflicts. The yield on the 10-year BTp, maturing on 1 July 2036, fell to 4.05 per cent from 4.07 per cent on Tuesday. The spread with the 10-year German Bund (which yesterday saw yields hit 15-year highs) narrowed to 81 points from 82 at the previous close.

In the currency markets, the euro/dollar is edging back towards 1.16 and stands at 1.1593 (from yesterday’s closing level of 1.1578), the single currency is also trading at 184.60 yen (from 184.79), whilst the dollar/yen cross rate stands at 159.22 (from 159.61). Gold is up, with the spot price at $4,345 per ounce (+0.26 per cent). On the energy front, the price of oil is up.

Weakness in the technology sector has weighed on Asian stock markets. South Korea’s Kospi was particularly hard hit, plummeting by 5.7 per cent, with Samsung Electronics down 6.9 per cent and SK Hynix down 7.9 per cent. In Tokyo, the Nikkei closed more than 3 per cent lower in the wake of Wall Street’s poor performance and, more generally, tensions on international markets linked to war, inflation and interest rates, which on Tuesday had also triggered a rise in Japanese government bond yields.

In Shanghai, shares in Unitree, one of China’s leading manufacturers of humanoid robots, initially soared by as much as 629 per cent on their stock market debut. The company, founded in 2016 by entrepreneur Wang Xingxing in the eastern Chinese technology hub of Hangzhou, raised around 6.1 billion yuan ($904 million) through its listing on the Shanghai Stock Exchange’s STAR Market. The shares were offered at 150.80 yuan ($22.36) each. By midday, the shares were still up by nearly 500 per cent.