Stock market: Europe up following the mid-term results; Milan (+1%) leads the way, driven by banks
Oil prices fall, gas prices slow, euro above $1.12
(Il Sole 24 Ore Radiocor) - European stock markets got off to a positive start, with investors’ eyes firmly fixed on the US, where the mid-term election results revealed a resounding defeat for the Republicans, who lost both the House of Representatives and the Senate. Although the final figures are yet to be confirmed, Democratic candidates hold a substantial lead and have even managed to win Republican strongholds such as Texas and North Carolina. Milan is the best performer (+1%) driven by banking shares, whilst Paris is up 0.35% and Frankfurt 0.4%. US futures, which had fallen sharply overnight, are, on the whole, relatively flat and mixed: the Dow Jones futures are up 0.4 per cent, whilst the Nasdaq futures are hovering around the break-even point. Investors are wondering what policies the Democrat-led Congress will pursue, particularly regarding the expansion of AI-related infrastructure. However, the comments from Donald Trump – who immediately acknowledged the Democrats’ victory and promised cooperation – and the view that the AI revolution is now a runaway train, are allaying investors’ fears. Meanwhile, on the government bond front, the election result continues to push down US bond yields: the 10-year yield stands at 4.93 per cent, continuing the downward trend seen in recent sessions. Trump’s threat to exercise a veto also reinforces the belief that little will change at an international level. Meanwhile, the market is awaiting news on the summit currently being organised between Russian President Vladimir Putin, US President Trump and Chinese President Xi Jinping to bring an end to the war in Ukraine. Furthermore, yesterday’s news of the halt to US funding for Israel raises hopes for negotiations in the Middle East as well. Oil prices have also recently begun to fall: North Sea Brent crude is down 0.4 per cent at $103.22 per barrel and WTI is down 0.3 per cent at $96.76. Gas prices have also slowed their rise, up 0.8 per cent at €92.37 per megawatt-hour.
In Asia, Tokyo – which had fallen by almost 5 per cent overnight – limited its decline to 1.42 per cent. By contrast, the Chinese markets are performing well, whilst the Seoul and Hong Kong stock exchanges are gaining ground. The euro is strengthening against the US dollar: it is trading at 1.1237 dollars (yesterday’s close was 1.1194). It is also worth 177.7 yen (up from 177.38), whilst the dollar/yen exchange rate stands at 158.13 (down from 158.46).
In Milan, bank shares are on the rise. UniCredit is leading the way, up by almost 3 per cent. Intesa Sanpaolo (+2.4 per cent) is also rising, following the release of its quarterly results, as is MPS (+2.3 per cent), ahead of the launch of the takeover bid. The asset management sector is also performing well, with Fineco up by over 3 per cent. Ferrari, after its strong performance the previous day driven by its results, is down 2.7 per cent. Stellantis is also weak (-1.4 per cent), on the day that German carmaker BMW published its quarterly results (-0.1 per cent). As for tech stocks, Technoprobe is performing well, up by over 2%, as is STMicroelectronics (+1.17%), on the day the company unveiled a strategic development in its STM32 portfolio. Prysmian shares fell by 0.4 per cent amid concerns that the build-up of AI in the US could slow down.
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