Stock markets: Europe flat, but oil shares surge as crude hits $90
The current stalemate in the Strait of Hormuz is weighing on the markets. Trump has said he may seek compensation from Iran for the victims of the regime. Little movement in futures on Wall Street. Spot gold returns to $4,400 per ounce
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(Il Sole 24 Ore Radiocor) - The European stock markets are trading cautiously with minimal movements, whilst uncertainties in the Middle East are reflected in further rises in oil and gas prices. Yesterday, the US President, Donald Trump, said that he might seek compensation from Iran for the victims of the regime. Meanwhile, Tehran insists that the United States must meet all its demands in order to reopen the Strait. “Statements from the US administration seem to suggest that the focus has shifted from military attacks to economic pressure,” comments Sally Auld, chief economist at National Australia Bank. Rising energy prices are also weighing on inflation, whilst the US is due to publish its consumer price indices tomorrow, to gauge the real outlook and try to anticipate the Fed’s next moves on interest rates. Currently, according to the CME FedWatch tool, the probability that the US central bank will raise interest rates by 25 basis points in September stands at just under 50 per cent.
Thus, against the backdrop of light trading typical of August, the main European stock markets are trading around the parity level, still not far from their highs: FTSE MIB, CAC 40 , DAX 40. Futures on Wall Street were also largely unchanged, following yesterday’s news that Nvidia is working with some of the world’s largest financial groups on a $500 billion package for the development of AI infrastructure.
Oil stocks perform well on the Milan Stock Exchange
On the Milan main index, oil stocks are leading the way in the wake of further rises in energy commodity prices, including Eni, Tenaris and Saipem, which is also benefiting from rumours of a contract in Kuwait. Buying interest is also driving up Azimut, Brunello Cucinelli and Prysmian, with Equita raising its target price for the share to 181 euros per share from the previous 178: according to analysts, the deal with Atkore “makes strategic sense by strengthening Prysmian’s exposure to the US electrification market”. Among others, Stellantis. Meanwhile, outside the main index, The Italian Sea Group, with the Baglietto Group confirming its interest in TISG’s production assets in the La Spezia area, as reported today by Il Sole 24 Ore.
Gold at two-month high, crude oil on the rise
Gold hit a two-month high overnight, rising above $4,400 an ounce in spot trading (its highest level since 5 June), before retreating. It is currently trading at around $4,390 an ounce. According to experts at Pepperstone, buying of the precious metal is being driven by a combination of improved positioning, favourable flow dynamics, lower real yields, a steeper yield curve and expectations of monetary easing by the Fed, coupled with purchases by central banks.
Oil Brent for October is up at around $89 a barrel, whilst the equivalent WTI is trading at around $83. The euro is little changed on the foreign exchange market, at $1.154 (from $1.1541 at the previous day’s close). The euro/yen exchange rate stands at 183.6 (from 183.5) and the dollar/yen at 159.1 (from 158.9). TTF gas in Amsterdam is largely unchanged at around 60 euros per megawatt-hour.
