Stock market: Europe regains ground as oil prices plummet and tech shares rebound; Milan up 0.9 per cent
-10.4 per cent for Brent, down to $105.33. Gas prices also plummeted
(Il Sole 24 Ore Radiocor) - Renewed hopes for peace in Iran have sent oil prices plummeting (-10% for Brent), whilst renewed optimism in the tech sector has brought buyers back to Wall Street following last Friday’s sharp sell-off. Against this backdrop, calm has also returned to the European stock markets, which closed the first trading session of November with substantial gains. Milan was no exception; thanks to a 0.9 per cent rise, it came within a whisker of the 50,000-point mark (closing at 49,947).
As mentioned, it was the new glimmers of hope for peace in the Middle East that have boosted risk appetite in the markets, with investors appearing to believe that a channel of dialogue between Iran and the US is reopening. According to an article in Axios, “President Donald Trump would prefer to continue diplomatic efforts, despite pressure from Israeli Prime Minister Benjamin Netanyahu, who is calling for an immediate resumption of military strikes following Tuesday’s US mid-term elections”, write analysts at Dnb. On the other hand, Tehran is reportedly ready to lift the blockade of the Strait of Hormuz within a few days, bolstered by the fact that, according to local media, the Supreme Leader has given his approval to the negotiations being conducted by the government. All these developments have been reflected in oil prices (-10.4 per cent for Brent to $105.33 per barrel and -6.78 per cent for WTI at $97.06) and gas prices (-9.7% to €93.9 per MWh), allowing the stock markets to catch a real breath of fresh air ahead of tomorrow’s mid-term elections.
"Investors should remain cautious," explains John Plassard of Cité Gestion, "in the run-up to these elections, which could heighten volatility in the coming trading sessions." On the other hand, “if the Republicans”, as the polls seem to suggest, were to “lose their majority in either chamber, it would become more difficult to push through Donald Trump’s legislative agenda, and support for the development of AI could come under closer scrutiny”, explains Ipek Ozkardeskaya, an analyst at Swissquote.
Turning to the equity market, Buzzi (+6.46 per cent) and Monceler (+3.66 per cent) are leading the way in Milan, whilst the rally in US tech shares is also boosting St (+3.54 per cent). On the other hand, Eni (-2.73%) is among the few shares in the red, bearing the brunt of the fall in crude oil prices.
