Stock market: Europe opens higher; in Milan (+0.23%), the focus is on the banking sector’s risks
The tech sector is struggling, with ST and Technoprobe down by over 4 per cent
(Il Sole 24 Ore Radiocor) - European stock markets opened higher, buoyed in part by the International Monetary Fund’s forecasts, which predict global GDP growth of 3.1 per cent this year. The concern, however, centres on inflation, which is set to halt its steady decline, mainly due to the negative supply shock caused by the war in the Middle East. In its autumn report, the IMF forecasts a rise in headline inflation from 4.1 per cent in 2025 to 4.7 per cent this year. Meanwhile, an important test for consumer prices is due tomorrow, with the publication of US inflation figures. Meanwhile, the quarterly results season is in full swing, with the major US banks set to report their results today. In early trading, Frankfurt is up 0.17 per cent, Paris 0.47 per cent and Madrid 0.2 per cent, whilst Amsterdam remains just above par. Milan is up 0.23 per cent, whilst the spread stands at around 110 basis points, on a day when the International Monetary Fund has upgraded Italia’s outlook, revising its GDP forecasts upwards: +0.8 per cent for this year and +0.6 per cent for next. Government bond yields, however, have been cooling since yesterday, with the ten-year Treasury yielding 5.19 per cent.
In Milan, technology shares are plummeting, in the wake of widespread selling across the sector, after the South Korean Kospi index fell by more than 5 per cent. Specifically, STMicroelectronics and Technoprobe are down by more than 4 per cent. The banking crisis also remains in the spotlight, in the wake of the detailed response from Siena – following an extraordinary board meeting – to Intesa Sanpaolo’s revised bid (+0.92 per cent). MPS (+1%) has not, for the time being, altered its strategy, and the Siena-based bank’s shares continue to move in line with those of Intesa, a sign that the market considers a victory for the institution led by Carlo Messina highly likely.
Luxury shares saw mixed performance in the wake of the publication of LVMH’s revenue figures (+0.5%), which for the first nine months of the year showed a 2 per cent decline at current exchange rates and a 2 per cent increase at constant exchange rates. Moncler, after a positive start, fell by half a percentage point, whilst Cucinelli rose by 1 per cent.
On the energy front, crude oil prices are trading lower following the previous day’s rise, buoyed by US President Donald Trump’s comments regarding the possibility of joining forces with Saudi Arabia in the fight against the Tehran-backed Houthis in Yemen, following yet another deadly attack on Riyadh International Airport. North Sea Brent crude is down 1.14 per cent at $105.43 per barrel, whilst WTI is down 1.4 per cent at $92.43. Gas prices have risen to €85.9 per megawatt-hour (+1.9 per cent). On the foreign exchange market, the euro is trading at $1.1190, compared with $1.1168 at yesterday’s close, and 176.9 yen (176.99). The dollar-yen exchange rate, meanwhile, stands at 158.16 (158.72).
