Stock market: Milan outperforms Europe and even breaks through the 53,000 mark in a session without the Wall Street
Then, towards the end, it narrowed the gap and closed up 0.3%
The surge in government bond yields, the lack of guidance from Wall Street (closed today for a public holiday, as is the Chinese market) and the uncertainty surrounding the future of the US and Iran – following the cancellation of the official signing ceremony for the agreement scheduled for today in Switzerland – are weighing on investor sentiment. European stock markets thus ended a volatile session on a weak note, with Paris down 0.55% and Frankfurt flat, whilst Milan – which had outperformed the other markets throughout the session, setting a new all-time intraday high of 53,188 points – weakened towards the close and ended up 0.31% at 52,848.
To take things in order, the appointment of Labour politician Andy Burnham to the British Parliament following the by-election has sent UK government bond yields soaring, which, in turn, has had a knock-on effect on European bonds. The Mayor of Greater Manchester is now in a position to challenge Prime Minister Keir Starmer, proposing a more left-leaning political agenda, with the market fearing a more expansionary economic programme involving greater intervention by the UK Treasury in the economy. Consequently, the 10-year British gilt closed at 4.83%, up from 4.75% yesterday, the yield on the French 10-year government bond rose to 3.73 per cent, and that on the Italian 10-year BTP to 3.69 per cent, up from 3.62 per cent yesterday.
Investors are also turning their attention to the Middle East: it is not yet clear whether the United States and Iran will actually manage to reach a peace agreement following the signing of the memorandum of understanding a few days ago, which paved the way for the start of formal negotiations. Meanwhile, however, according to Reuters, Israel and Hezbollah have agreed to a ceasefire, which has already been violated by Tel Aviv, according to the Lebanese national news agency.
Turning to the equity market, the Milan Stock Exchange is being buoyed by oil stocks, with Saipem and Eni up 2.37 per cent, despite mixed trends in oil prices: Brent crude is up 0.4% at $80.1 per barrel, whilst WTI is down 0.34% at $76.3. Turning back to FTSE MIB stocks, buying interest is also boosting Diasorin (+2.1%), which has received approval from the US FDA for a new molecular test for Group A Streptococcus, and Prysmian (+3.7%). Defence stocks lost ground compared with early trading but closed in positive territory, with Leonardo up 1.66% and Avio up 0.7%, whilst Fincantieri led the way with a gain of 3.4%. The luxury sector trailed behind, with Brunello Cucinelli down 3.55%.
