Stock market: Europe weak ahead of ECB decisions; energy costs a cause for concern
Milan is down 0.4 per cent. Eni bucks the trend (+1 per cent)
(Il Sole 24 Ore Radiocor) - European stock markets opened lower, continuing the downward trend that began the previous day. In early trading, Frankfurt is down 0.47 per cent, Paris 0.61 per cent, Amsterdam 0.24 per cent and Madrid 0.13 per cent. Milan is also down 0.44 per cent.
Traders are concerned about tensions in the Middle East, including the tit-for-tat attacks between the United States and Iran, the sanctions imposed by certain countries on Israeli settlers, and the allegations against Prime Minister Benjamin Netanyahu, who, according to press reports, is said to have been warned of the attack on 7 October 2023. Although oil prices have not surged, they remain at high levels, fuelling fears that global inflation may continue to rise. North Sea Brent stands at $99.55 per barrel (+1.6 per cent) and WTI at $94.3 (+1.3 per cent). Gas prices are also rising: in Amsterdam, it is trading at 78.4 euros per megawatt-hour (+3.4 per cent). The prospect of rising inflation will be on the agenda of the European Central Bank’s Governing Council, which is meeting today and tomorrow and which, according to analysts, is set to announce a further rate rise, taking rates to 2.5 per cent. The real puzzle, however, concerns the central bank’s future moves, as well as the decisions to be taken by the Federal Reserve next week. The market is betting on a tightening stance, so much so that government bond yields remain high: the 10-year Bund yields 3.37 per cent, the Italian BTP 4.17 per cent and the US Treasury 4.8 per cent. The Bank of Japan is also set to announce its decision next week; to support the yen, it is expected to raise interest rates.
On the Milan Stock Exchange, Eni is up, buoyed by the performance of oil prices: it has gained 1.1 per cent. In the oil sector, however, Saipem and Tenaris are down by 0.6 per cent and 1 per cent respectively. Banks are trading weakly, with Intesa Sanpaolo down 0.7% on the eve of the AGM that is set to give the green light to the capital operation in support of the public offer for MPS, which is itself down 0.7%. Meanwhile, yesterday, non-executive directors Gianluca Brancadoro (independent) and Alessandro Caltagirone (non-independent) were co-opted onto the board of Rocca Salimbeni. STMicroelectronics fell by 0.28% on the day Apple is set to unveil its new foldable iPhone. Finally, TIM fell by 0.3 per cent in the final days of the public offer launched by Poste Italiane, which itself fell by 0.5 per cent following an upward revision of the cash price per share.
In the currency markets, the euro stands at 1.1639 dollars (yesterday’s close was 1.163 dollars) and 178.42 yen (179.33), whilst the dollar-yen exchange rate is at 153.3 (154.2). Gold is trading largely unchanged, with futures at $4,444 per ounce (+0.12 per cent), whilst bitcoin is trading at $79,275 (+1 per cent).
