Stock market: Mixed performance across Europe; Milan holds steady on the back of ST and oil stocks
Fears of inflation rise as crude oil prices rally; Brent at $91.2
(Il Sole 24 Ore Radiocor) - European stock markets have started September on a mixed note, following the lead of Asian markets. Investor sentiment is being weighed down by renewed tensions in the Middle East, which are pushing up oil prices and reigniting fears of a surge in inflation. Brent crude for November delivery rose by 0.86 per cent to $91.2 per barrel, whilst WTI for October traded at $86.5 (+0.87 per cent). Gas prices in Amsterdam are also up at €70.3 per megawatt-hour (+0.7 per cent). Following the resumption of hostilities between Washington and Tehran, US President Donald Trump said that the US would “strike hard”, whilst the Iranian armed forces warned Middle Eastern countries against allowing the US to use their territory or airspace for attacks against Iran, stating that Tehran would respond with “significantly greater” force to any new aggression. However, a sign of openness came from Iranian President Masoud Pezeshkian, who said at the Shanghai Cooperation Organisation summit that if the United States fulfils the commitments it made under the memorandum of understanding signed in June, Iran will immediately do the same.
Thus, the FTSE MIB in Milan is trading flat (+0.04 per cent), whilst the DAX in Frankfurt is down (-0.3 per cent), London’s FTSE 100, which was closed yesterday for a public holiday (-0.4 per cent), and Madrid’s IBEX (-0.1 per cent). By contrast, Paris’s CAC (+0.4 per cent) and Amsterdam’s AEX (+0.3 per cent) are holding their ground.
On the macroeconomic front, investors are awaiting today’s European inflation figures, whilst US employment data due at the end of the week will be significant, particularly in light of the inflation concerns expressed by the Fed Chair, Kevin Warsh, at Jackson Hole, which have fuelled concerns about an accelerated rise in interest rates by the Federal Reserve and the ECB.
On the stock market, StMicroelectronics is leading the way on the Milan Stock Exchange (+2.4 per cent), after Nvidia announced a $3.5 billion investment in the Taiwanese chipmaker MediaTek (+10 per cent in Taiwan). Buying continues in oil stocks, thanks to the rally in crude oil prices: Eni is up 2 per cent, Tenaris 1.2 per cent and Saipem 1 per cent. Stellantis is also performing well (+0.8%) following the appointment of Arnaud Belloni as CEO of Fiat, Abarth and Lancia and Chief Marketing Officer for Europe. On the other hand, the defence sector was weak, with Fincantieri down 1.2 per cent and Avio and Leonardo down 0.7 per cent. Banks also saw selling pressure, with Banca Mediolanum (-1 per cent) leading the sector’s declines. Bringing up the rear was Lottomatica, down 1.4 per cent.
