Stock markets: high volatility across Europe. Milan breaks even, but tech and oil weigh on the market

(Il Sole 24 Ore Radiocor) - Volatility soared on the European stock markets, which rallied in the latter part of the session, only to lose ground again. The driving forces were the fall in oil prices and Wall Street, where positive quarterly results are offsetting, at least in part, the pressures felt in the AI sector. These sudden swings demonstrate that the markets remain under pressure at this stage, amid fears over inflation, bond yields and geopolitical tensions. The Israeli broadcaster Channel 12 also contributed to the market volatility, reporting on a proposal – presented today by the head of the Pakistani army to senior Iranian officials – which is said to have secured US approval and has already received preliminary approval from Iran. Meanwhile, tensions fuelled by protests in several European countries persist.

This surge of optimism pulled the continent’s stock markets out of the doldrums, and Milan (-0.03%) held on to the 49,000-point mark at the close. Frankfurt was also largely unchanged, whilst Paris closed lower (-0.4%) on the day the Parliament voted on the first part of the budget bill.

Wall Street indices are also recovering from their initial falls, with AI-related shares largely regaining lost ground. The market is also focusing on quarterly results: today, amongst others, the results from Netflix and SpaceX (Space Exploration Technologies) are due to be released. Tomorrow it will be the turn of the tech giants IBM, Meta and Tesla, whilst we await results from other Big Tech firms next week. A season that will conclude on 18 November with Nvidia’s quarterly results. Meanwhile, the focus is on Intel and, once again, on Coreweave Inc-Cl A, which is up today. Sentiment in the sector had taken a heavy blow this morning following the plunge of over 30 per cent recorded by the South Korean AI firm Elice, on its stock market debut. Still on the equity front, General Motors is losing ground following its results. The company has also announced a new $20 billion share buyback programme.

Brent has, in the last few hours, exceeded $111 a barrel, before settling back around $108, following rumours of a potential US-Iran deal. This morning, Brent had recorded a rise of around 80 per cent since the start of the year, as the intensification of conflicts in the Middle East and between Russia and Ukraine continues to disrupt energy supplies. In particular, the resumption of attacks on oil tankers and energy infrastructure is keeping geopolitical risks high, despite the recovery in crude oil flows from the Persian Gulf and the latest developments on the diplomatic front. Gas prices are also falling , having reached 90 euros per megawatt-hour in Amsterdam before dropping back to 85 euros.

On the Milan Stock Exchange, the utilities sector performed well, with Enel (+2 per cent) and Italgas (+2 per cent) among the top performers. There was also buying interest in Inwit (+2.4 per cent), Amplifon (+2.2 per cent) and Unipol (+2.2 per cent). The trend in oil prices, however, weighed on oil and gas stocks, which were down, with Tenaris (-0.8%) and Saipem (-4.3%). There was also selling pressure on luxury stocks, particularly Cucinelli (-1.7%), but also Moncler (-0.9%), ahead of tomorrow’s quarterly results. Tech shares recorded another session of losses, although well off the day’s lows, notably St (-0.5%), whilst Prysmian (-2.6%) and Technoprobe (-3%) continued to be heavily impacted by their results. Banking shares closed with losses that were less severe than their intraday lows – and in some cases even posted gains – ranging from MPS (+0.3%) to Intesa (-0.3%). However, BPM (-1.4%) is being weighed down by the decision from Jefferies, which has lowered its target price, whilst confirming its ‘Hold’ rating.