Stock market: Milan surges, on track for its best half-year (+17.6%) amongst the major exchanges
It is not only the winds of peace and SpaceX that are driving the game of Risk
Another record-breaking week for the Milan Stock Exchange, with the FTSE MIB breaking through the 52,000-point barrier on Monday and the 53,000-point barrier today, session after session. The main drivers behind the markets were, first and foremost, the breakthrough between the US and Iran – which signed a memorandum of understanding paving the way for a peace agreement – the subsequent reopening of the Strait of Hormuz, which caused oil prices to plummet, and the rally in SpaceX shares, which propelled the global tech sector. As a result, Milan closed the week up 2.6 per cent and is set to finish the first half of the year at the top of the class, not only in Europe but also amongst the world’s leading stock markets. In fact, if we exclude Tokyo’s Nikkei (which has posted a gain of over 41% since the start of the year) and Seoul’s Kospi (+114%), the best-performing index is none other than the FTSE MIB, up 17.6% since 1 January, even outperforming the Nasdaq (+13.2%). Turning to the week’s performance, only Madrid outperformed the Milan Stock Exchange, up 3.1 per cent; Frankfurt (+1.6 per cent) and Paris (+0.8 per cent) also fared well, whilst London (-1 per cent) lagged behind, grappling with a deep political crisis and a loss of public support. The past week also saw the first Fed meeting chaired by the new chairman, Kevin Warsh: the US central bank kept interest rates unchanged, but the new governor struck a ‘hawkish’ tone. In his first press conference as head of the central bank, Warsh emphasised that the Federal Reserve will not tolerate high inflation.
At sector level, banks are leading the way in Europe (+5% for the week), with the Italian banking sector’s turmoil sending the FTSE Italia All-Share Banks index soaring by +6.7%. Indeed, looking more closely at individual shares, the week’s top performers are precisely the key players in the credit sector’s restructuring: MPS – the object of desire in this second round of the banking reshuffle – is the top performer, gaining 22.5%, followed by its subsidiary Mediobanca (+21.5%) and Banco BPM (+18.8%), which is seeking a merger with Siena. On the other hand, Stellantis (-10.4%) was hit hard, as was the entire European automotive sector (-3.8% for the week), by BMW’s ‘profit warning’. Avio was also down (-10.2%), although it has recorded a gain of 17.3% since the start of the year, as was Diasorin (-8.9%).
On the commodities front, crude oil prices have plummeted: Brent fell by 7.5% over the week, whilst WTI dropped by 9.4% in the wake of signs of international détente and the reopening of the Strait of Hormuz. Gas prices in Amsterdam were also down by 9.5%. In the currency markets, the euro fell by 0.9% against the dollar, whilst spot gold also declined by 1.6% over the week.
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