Stock market: Europe still in the red amid tensions in the Middle East and soaring oil prices; Milan down 1.2 per cent
All eyes are on the Fed’s moves tomorrow and the tech sector
(Il Sole 24 Ore Radiocor) - European stock markets have opened lower once again, following on from a broadly weak performance in Asian markets. Traders continue to monitor tensions in the Middle East, after Iran denied any negotiations with the US, fuelling the surge in crude oil prices. Attention also remains focused on the Fed and tomorrow’s likely interest rate rise. The tech sector remains under close scrutiny following yesterday’s slump, triggered by concerns over AI and its security.
Milan is down 1.2 per cent, Paris 0.5 per cent and Frankfurt 0.4 per cent. Meanwhile, Brent crude briefly touched $110 a barrel yesterday, before retreating to $107.7 (+1.9 per cent), whilst WTI stands at $103.4 (+2 per cent), after the latest attacks damaged a Saudi oil pipeline crucial for bypassing the blockade at Hormuz. Yields are also at record highs: the 10-year US Treasury yield remains just above 5 per cent, for the first time since 2023. On the macroeconomic front, the ZEW index on German economic sentiment is due to be released.
On the Milan Stock Exchange, it is primarily the banking sector that is weighing on the market, starting with Unicredit (-2.6 per cent), regarding which the German government yesterday outlined the conditions for acquiring a 12.7 per cent stake in Commerzbank (-0.7 per cent in Frankfurt). Meanwhile, the standoff between Intesa (-1.7%) and MPS (-1.4%) continues, with MPS considering its public exchange offers (OPs) for BPM (-1.7%) and Banca Generali (-2.1%) to be irrevocable even should Intesa’s public takeover bid (OPAS) succeed, though it has recalculated the exchange ratios at Consob’s request, applying a discount to exclude the ‘Intesa effect’. The tech sector remained weak, with St (-1.1%) and Prysmian (-0.8%), the latter having secured US antitrust approval for its acquisition of Atkore. On the gains side, Avio stood out (+1.1%) following the successful launch of the Sentinel satellites by the group’s Vega C rocket. Utilities also performed well, with Tenaris (+1%), Italgas (+0.6%) and Eni (+0.4%) buoyed by the rally in oil and gas prices.
TTF gas prices in Amsterdam are up slightly at 82.8 euros per MWh (+0.3 per cent). In the currency markets, the dollar is strengthening against the single currency, with markets pricing in a Fed rate rise tomorrow and looking to Kevin Warsh’s speech for clues on the future: the euro is trading at 1.1537 dollars (down from 1.1549 the previous day); the US dollar is also trading at 154.9 yen (from 154.3), with a rate rise also expected from the BoJ on Friday.
