Stock markets in the red in September amid high oil prices and a bond market slump. Milan down 2.4 per cent
In the third quarter, the FTSE MIB fell by 0.6 per cent, whilst the oil and gas sector rose by 11.5 per cent. Wall Street performed well in the final trading session of the month, buoyed by better-than-expected GDP and inflation figures. The spread stood at 102 points
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(Il Sole 24 Ore Radiocor) – A turbulent return from the summer break for investors on global financial markets, in a September marked by high crude oil prices and soaring bond yields, amidst fears over the sustainability of public finances and renewed inflationary pressures, whilst hopes for a truce in the Middle East have been dashed time and again. Oil experienced a strongly bullish and volatile month, with Brent rising by 14.4 per cent in September (+42.4 per cent for the quarter) and WTI by 12.8 per cent (39 per cent for the quarter) in the wake of supply concerns linked to the closure of the Strait of Hormuz. A sell-off in the bond markets pushed yields to levels not seen for years: the 10-year Treasury yield rose to just under 5.3%, its highest level since 2007, marking the largest monthly rise in the last two years (over +51 basis points).
In Europe, too, the month ended with pressure on government bonds. The spread between BTp and Bund bonds rose above 100 basis points, to its highest level since May 2025, on the final trading day of September, having widened by 22 points over the month. The yield on the Italian 10-year BTp rose to 4.6 per cent, close to the highs reached in October 2023, whilst the German Bund yield closed the month at 3.58 per cent. Meanwhile, the French 10-year OAT rose to 4.84 per cent – its highest level in 18 years – with a spread over the German Bund of 128 basis points.
Against this backdrop, European stock markets closed with a monthly fall of 2.2 per cent for the Euro Stoxx 600 (-1.7 per cent for the quarter), with a 2.4 per cent decline for the FTSE MIB , which, however, limited its losses for the quarter (-0.6%). Paris was the worst performer (-4.4% in September and -5.2% for the quarter), whilst the DAX posted a monthly loss (-4%) but ended the quarter in positive territory (+0.9%). Madrid followed the trend set by the Milan Stock Exchange (-2.7% for the month and -0.2% for the quarter). The sell-off hit automotive stocks particularly hard (-8.4% in September and -1.3%), with Stellantis on the Milan Stock Exchange plunging by 18% over the month (-21% for the quarter). A quarter to remember for the oil & gas sector (+11.5%), with gains of 2 per cent over the last month, during which Eni rose by 3.1 per cent (+16.3 per cent over the three months). Tech stocks were also under the spotlight (+2% over the month and -1.4%), with ST up 8.9% in September (-27.2% for the quarter), amid fears over the sector’s substantial investments alternating with fresh waves of optimism.
Slowing US inflation not enough for EU stock markets; Milan down 0.8%
A subdued Wednesday for European stock markets, which gradually lost ground after a positive start. A better-than-expected US GDP figure and lower-than-expected inflation in the United States did little to help: oil prices, which have risen again, continue to weigh on the markets, fuelling inflationary risks. Attention also remains on the bond market, which is set to close its worst month in recent years, whilst uncertainties over the war in Iran persist. Milan thus closed down 0.84 per cent at 51,371 points, falling in line with other European markets. Meanwhile, in the US, attention is focused on the latest macroeconomic data, which experts say reduces – albeit only slightly – the likelihood of a Fed rate rise in October. As mentioned, the price of oil resumed its rise this morning, whilst inflation figures in Europe reflect the energy shock and show a +3 per cent rise for France in September, +4.2 per cent for Italy, +4.9 per cent for Spain, +3.3 per cent for Germany and +4.7 per cent for Belgium.
Wall Street rises following inflation and GDP figures
By contrast, the indices on Wall Street are rising sharply, also here on the final trading day of September and the third quarter, following the release of new US economic data showing a slowdown in inflation last month. The CME FedWatch now shows that traders see a 37 per cent chance of a quarter-point rise in interest rates in October; on Monday, that figure stood at 71 per cent. In the equity market, tech stocks are performing in a mixed bag, ranging from Nvidia Corp to Intel.
