Stock markets: Europe remains cautious, with eyes on tech and Iran. St rebounds in Milan

 (Il Sole 24 Ore Radiocor) - European stock markets are trading cautiously, following the previous day’s sell-off amid renewed concerns over the valuations of technology companies. Wall Street, too, despite recovering towards the close, suffered a setback, affected by selling pressure, particularly on semiconductor stocks, a trend that had already begun on Monday. The Nasdaq Composite slipped by 2.2 per cent, the Dow Jones closed virtually unchanged and the S&P 500 fell by 1.4 per cent. Across the Atlantic, on the day the Federal Reserve is due to publish its annual bank stress tests, investors are awaiting Micron’s quarterly results, which are due to be released after the markets close. Meanwhile, the Middle East remains under scrutiny, whilst negotiations between the United States and Iran continue in a bid to reach a peace agreement.

Against this backdrop, the FTSE MIB in Milan is trading cautiously, as are the other European stock markets.

Saipem is performing well on the Milan Stock Exchange Saipem is performing well, following the sale of certain assets in Saudi Arabia for $285 million. Also in the spotlight is Poste Italiane is also in the spotlight, buoyed by a positive rating from Barclays and in the wake of Telecom Italia . Banks are once again in the spotlight, particularly following the news that emerged yesterday. The chief executive of Banca Monte Paschi Siena , Luigi Lovaglio, has stated that the bank will evaluate all the options on the table, seeking to guarantee the institution’s independence. Andrea Orcel, CEO of Unicredit , said that in Italia the group will remain on the sidelines as a spectator, whilst continuing its campaign to take over Commerzbank , over which it is edging ever closer to gaining control. Following yesterday’s slump, Stmicroelectronics and Prysmian remain under the investors’ microscope. The defence sector is under pressure, with Avio and Leonardo , dragged down by the collapse of Rheinmetall following the German government’s decision to halt the construction of six frigates.

Oil is trading sideways: WTI is hovering around $73 a barrel and North Sea Brent is below $77. gas, on the other hand, is trading below 42 euros per megawatt-hour on the Amsterdam TTF. On the foreign exchange front, the US dollar continues to strengthen: the euro remains below the $1.14 mark (1.1380 at the previous close). The spread is also flat. The yield spread between the benchmark 10-year BTp and the German Bund of the same maturity stands at 72 basis points, the same level as yesterday’s close. The yield on the benchmark 10-year BTp, on the other hand, is down slightly.

Asian stock markets were mixed as the trading day drew to a close. The Tokyo Stock Exchange closed lower, affected by yesterday’s slowdown in international markets, which had halted the technology sector’s upward trend. The Nikkei index fell by 0.88% to 69,174.97 points. The broader Topix index also performed poorly, down 0.67% to 3,963.76. “The Nikkei index remains close to its all-time highs, which is likely to put selling pressure on semiconductor stocks, which have recorded significant gains so far and are therefore subject to profit-taking,” note experts at Tokai Tokyo Intelligence. According to other observers, market sentiment was further negatively affected by signals of monetary tightening from national central banks. By contrast, the South Korean Kospi index performed well, closing up 3.26% at 8,471 points, driven in particular by the recovery of memory chip giants Samsung and SK Hynix – both of which had plummeted by around 12 per cent yesterday.