Stock markets: Europe weak amid tensions in the Middle East. Richemont leads the luxury sector

(Il Sole 24 Ore Radiocor)- European stock markets are trading cautiously, with investors continuing to monitor developments in the Middle East. Whilst Donald Trump has backtracked on the 20 per cent tariff on goods passing through the Strait of Hormuz, Tehran has announced that the Strait will remain closed until US acts of aggression cease. Tensions therefore show no sign of easing: speaking to Fox News, the White House occupant announced that next week he will target power stations and bridges in Iran, if no agreement is reached with Tehran.

Meanwhile, across the Atlantic, the quarterly results season is in full swing. In the banking sector, it will be the turn of Blackrock and Morgan Stanley; whilst in the chip sector, ASML has reported results above expectations whilst markets are still closed. On Wednesday, it will be the turn of the other tech giant, TSMC. These are important figures that serve as a litmus test for assessing demand for microchips, given recent market doubts about the sustainability of the rally in AI-related shares.

In the background, as always, are the central banks, in particular the Fed. This afternoon, Chairman Kevin Warsh will present the monetary policy report to the US Senate Banking Committee, whilst the publication of the Beige Book is expected this evening. Already the day before, Warsh, speaking at a congressional hearing, had promised a change of course to eliminate the ‘inflation tax’. Thus, FTSE MIB is trading cautiously; the same story for the CAC 40 and the DAX 40 . Stronger gains for the IBEX 35, driven by ASML’s strong results.

Investments in the luxury sector with Brunello Cucinelli and Moncler are leading the gains, driven by strong results from Cie Financière Richemont SA . The tech sector is in the spotlight following ASML’s better-than-expected results. This is driving up STMicroelectronics on the Milan Stock Exchange. The focus is on Poste Italiane after the Bank of Italy gave the green light to the indirect acquisition of the qualifying holding held by Telecom Italia in Timfin spa, a joint venture between the telecoms company led by Pietro Labriola and the Spanish bank Santander. Once this final authorisation has been obtained within ten days, Consob will have to approve the prospectus for the transaction that will lead to the creation of the national leader in digital transformation. Still in the telecommunications sector, keep an eye on Inwit : The Court of Milan has rejected the application for interim relief filed by the company as part of the interim proceedings brought against Fastweb, following the telecoms operator’s termination of the master service agreement with Inwit.

Despite conflicting reports regarding the Strait of Hormuz, oil prices have recently fallen. Brent is trading at around $85 (+0.6%), whilst WTI stands at $79 (+0.44%). Gas prices are rising, trading at around 54 euros per megawatt-hour in Amsterdam (+1.7%). On the currency front, the euro/dollar exchange rate stands at 1.1428 (1.1440 dollars at yesterday’s close), the euro/yen exchange rate at 185.40 (184.32 yen), whilst the dollar/yen exchange rate stands at 162.21 (161.99).