Stock market: Europe cautious over postponement of US-Iran talks; Milan (+0.4%) hits record high, led by defence shares
Oil prices little changed; euro at 1.1444 dollars
European stock markets are up slightly, following yesterday’s rally on Wall Street, with the Nasdaq closing 1.9 per cent higher. Milan rose to new record highs (+0.46%) and has its sights set on 53,000 points, whilst Paris gained 0.26% and Frankfurt 0.33%. Amsterdam was down (-0.26%), whilst Madrid remained stable. Investors are maintaining a cautious stance, particularly in light of the heavy attacks that took place overnight in Lebanon between Israel and Hezbollah, which are casting a shadow of doubt over the agreement signed in recent days between the United States and Iran to end the conflict in the Middle East. Furthermore, the official ceremony scheduled for today in Switzerland to sign the agreement – which is in fact merely a memorandum of understanding paving the way for the actual negotiations – has been cancelled. The negotiations, which are set to take place over the next 60 days, will need to resolve key issues crucial to achieving peace, starting with the handling of Iran’s enriched uranium. Meanwhile, Israel’s stance – having strongly criticised the agreement – is fuelling uncertainty over the stability of the framework agreement and the talks in the coming weeks. Today, both the Chinese stock exchanges and Wall Street are closed for public holidays and, as a result, the European markets will lack key benchmarks. Furthermore, indices and shares could experience greater volatility as technical deadlines approach.
On the Milan Stock Exchange, banks remain the focus of attention. MPS is trading little changed, whilst the market continues to speculate on the bank’s future. Yesterday, the Minister for the Economy, Giancarlo Giorgetti, stated that the government is maintaining a neutral stance on bank mergers, but at the same time did not rule out the possibility of imposing conditions on the deal recently proposed by Intesa Sanpaolo (INV) for MPS, a bank in which the Treasury still holds a stake of just over 4 per cent, which is set to be divested on the best market terms, perhaps through an accelerated placement (Abb). Market participants are also watching Unicredit’s (+0.97%) next moves and, in particular, any negotiations the bank may be holding with Delfin, the Del Vecchio family’s financial holding company, to acquire the stake held in Generali (-0.26%). Leonardo (+2%) and Avio (+3.7%) are leading the FTSE MIB, driven by the defence and aerospace sectors respectively.
On the foreign exchange market, the US dollar continues to strengthen against the euro, with the euro-dollar exchange rate standing at 1.1444 (down from 1.1479 in the previous session). The single currency is also trading at 184.55 yen (184.72), whilst the dollar-yen exchange rate stands at 161.26 (160.90). On the energy front, oil prices are mixed, with WTI down 0.6% at $76.14 per barrel and Brent unchanged at $79.89. Finally, natural gas in Amsterdam jumps 2.9% to €41.67 per megawatt-hour.
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