Stock markets: Europe remains cautious. In Milan, all eyes are on the banking sector’s risks

(Il Sole 24 Ore Radiocor) – European stock markets opened higher (with the exception of Paris) but then turned lower, fluctuating several times following news of early elections in Spain. “After duly informing the Head of State, I have decided to convene an extraordinary Council of Ministers this very morning to dissolve the Cortes Generales (the two houses of Parliament, ed.) and call general elections, which will be held on Sunday 29 November, in accordance with the terms laid down by law”, announced the Spanish Prime Minister, Pedro Sánchez. The yield on the Spanish 10-year bond rose from 4.06 per cent to 4.08 per cent in a matter of seconds. Political developments continue to influence the performance of government bonds both in Europe and across the Atlantic, with yields at their highest levels in years. The US 10-year Treasury yield stands at 5.26 per cent, a level that is raising doubts and concerns, despite being below the highs reached last week above the 5.3 per cent threshold – levels not seen since 2002. Meanwhile, investors’ attention remains fixed on the Middle East: the Houthis have attacked Saudi Aramco facilities, and Riyadh has already announced new offensives in Yemen. The price of crude oil, however, is falling: the WTI is trading at $90 per barrel, down 1.15 per cent, whilst North Sea Brent stands at $101.5, down 0.7 per cent. Gas prices in Amsterdam, on the other hand, are rising, albeit slightly: the benchmark contract stands at 75.6 euros per megawatt-hour, up 1.15 per cent. Last Friday, Wall Street closed higher, with the Nasdaq hitting new highs, following the release of a surprisingly weak employment report, which reinforced expectations that the Federal Reserve would keep interest rates unchanged in October.

The Italian spread, after hitting highs of around 130 points on Friday, stands at 120 basis points today, up from Friday’s closing level of 117 points. The yield on the benchmark 10-year BTp has fallen to 4.61 per cent from 4.69 per cent recorded the previous day. The yield on the German Bund continues to fall and now stands at 3.43 per cent, whilst the yield on the 10-year French OAT continues to rise and stands at 4.90 per cent. The spread between the OaT and the Bund stands at 147 points, five points higher than the previous day. Tensions in France are causing concern ahead of next year’s elections, when, incidentally, Italia will also be heading to the polls.

In Milan, all eyes are on the banks, and in particular on Intesa Sanpaolo and Banca Monte Paschi Siena following the news that the bank led by Carlo Messina has decided to raise its bid for Rocca Salimbeni, provided, however, that the Siena-based bank’s general meeting, scheduled for the end of the month, does not approve the merger with Banco BPM and Banca Generali. Specifically, Intesa has put 25 cents more on the table for each MPS share. MPS shareholder Delfin has already indicated that it will accept Intesa’s offer. Mediobanca is down 4 per cent. Meanwhile, Bper Banca is surging – the institution set to acquire half of the Siena-based bank, along with its brand and headquarters. Generali also remains under close scrutiny, given that the long-term repercussions of Intesa’s takeover of MPS will also reach Trieste. Outside the banking sector, Technoprobe, which is rising in line with the tech sector, which has performed well on the Asian stock markets. Also performing well are Amplifon and Fincantieri. Down, on the other hand, were Prysmian and Snam . Outside the sector, Technoprobe (+1.88%), Amplifon (+1.51%) and Fincantieri (+1.4%) were in the green. Prysmian (-0.96%) and Snam (-0.5%), on the other hand, were down.

As regards extraordinary transactions, today Webuild has raised its bid for Trevi Fin Ind to €5.165.

The MSCI Asia Pacific share index rose by 0.9 per cent, with Japan’s Nikkei 225 closing the session up 2.4 per cent, buoyed by gains in technology shares. Taiwan Semiconductor Manufacturing, a leading chip manufacturer, rose by 3 per cent on the back of a potential partnership with Terafab, a company owned by Elon Musk. Sentiment towards the technology sector remained positive across the Atlantic too: Nasdaq 100 futures gained 0.2% after the benchmark index had closed at an all-time high on Friday.