EU stock markets rise amid falling oil prices and hopes for peace in Iran

(Il Sole 24 Ore Radiocor) - The European stock markets have got August off to a good start, following yet another U-turn by President Trump on the conflict in the Middle East. Following Friday’s threats to strike Iran ‘with great force’, and the call for US citizens to ‘consider leaving’ the Middle East due to a possible ‘escalation’ of the regional conflict, the White House occupant then announced on Sunday 2 August on Truth the suspension of attacks, on condition that “an agreement is reached quickly”. The US administration’s new openness to a possible agreement, which would also include the free flow of traffic through the Strait of Hormuz, is also causing oil prices to fall. On the macroeconomic front, July’s US labour market data is eagerly awaited this week.

In this context, the FTSE MIB in Milan is up, as are the other indices across Europe. On the stock market, Unipol is leading the way.

Meanwhile, the earnings season continues. Several Italian banks are due to report their results (Banco Bpm , Bper Banca , Banca Monte Paschi Siena ) and other financial institutions (Generali, Allianz , Unipol ). Elsewhere on the Milan Stock Exchange, the market is dominated by the rise in Diasorin following several upgrades by analysts after the solid results presented on Friday. Financials are performing well, with Unipol stabilising after an initial surge that had taken it to the top of the FTSE MIB with a rise of more than three points. The banking sector is moving at different paces, with rumours about the sector’s volatility still dominating the headlines. Prysmian , after the initial enthusiasm following the announcement of the acquisition of the American firm Atkore, is now heading lower. Bringing up the rear on the index are oil stocks, which are tracking crude oil prices, with Eni bringing up the rear.

As concerns over energy supplies from the Middle East have eased, prices for oil, having closed July with the biggest monthly rise since March. Adding to the geopolitical backdrop is OPEC+, which yesterday increased oil production for the sixth consecutive time. Brent futures maturing in October have thus fallen by over 7% to around $83 a barrel. Gas prices are also down by 5%. In the currency markets, the euro/dollar is trading around 1.15. The yen is recovering, following joint intervention by the United States and Japan in the foreign exchange market to prop up its value.