EU stock markets: Frankfurt brings up the rear following the AfD’s victory. Milan holds its ground thanks to Lottomatica

(Il Sole 24 Ore Radiocor) - The AfD’s victory in Saxony has reignited fears of political instability in Germany and across Europe. European stock markets, however, weathered the shock and ended a largely lacklustre session – marked by the absence of Wall Street, which was closed for Labour Day – with mixed results. Against this backdrop, Milan posted a 0.25 per cent gain thanks to a rally in Lottomatica, whilst Frankfurt recorded the biggest loss (-0.25 per cent), though it managed to recover some ground in the closing stages of the day, thanks to reassurances from German Chancellor Friedrich Merz.

The CDU leader said he was, in fact, “shocked” by the AfD’s electoral triumph in Saxony-Anhalt, which has brought a far-right party within a hair’s breadth of regional power for the first time since the Second World War. However, he made no mention of resigning and stated his intention to take direct political “responsibility” for the result.

On a day with few macroeconomic data releases, investors’ attention is focused on next Thursday (10 September) with the ECB meeting and the usual press conference by President Christine Lagarde. The consensus is that the European Central Bank could implement a further interest rate rise (the second this year) of 25 basis points, bringing the deposit rate to 2.5 per cent in response to inflation driven by rising energy prices. Then, on Friday, US inflation figures will be released, which will in turn guide the Fed’s monetary policy decisions ahead of its meeting on 16 September.

Against this backdrop , the stalemate in the conflict between Russia and Ukraine and the situation in the Middle East following the US attacks on Iranian oil tankers and Tehran’s threat to establish a new restricted zone off the Strait of Hormuz. All this is driving up oil prices, with Brent approaching $98 per barrel and WTI at around $93. Gas prices are also rising, exceeding €73 per megawatt hour in Amsterdam. Of note is the decision by the OPEC+ countries (Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman) which ‘have decided to maintain the production levels scheduled for September 2026 for October 2026 as well’.

On the stock market, the rally continues for Lottomatica Group continues its rally, closing at the top of the table: the company estimates that, within the third year following the completion of the transaction with Cirsa (+6% in Madrid), it will be able to achieve incremental online EBITDA at full capacity of between approximately €200 million and €300 million. The positive run for technology stocks continues, with STMicroelectronics among the top performers. Prysmian and oil companies are also performing well. Moncler closed higher, with Rothschild raising its target price from 54 to 56 euros and its recommendation from ‘neutral’ to ‘buy’.