Weak stock exchanges without Wall Street's lighthouse. Milan holds (-0.3%) with Eni and Intesa Sp

(Il Sole 24 Ore Radiocor) - European stocks were weak in a session devoid of Wall Street, closed for the holidays. The stock markets were affected by the European Commission's announcement of the initiation of the official process to open excessive deficit procedures against seven countries: Belgium, France, Italy, Malta and Slovakia for the eurozone, plus Hungary and Poland. The main list of the Milan Stock Exchange closed with a limited decline of 0.29%, when all the main indexes of the Old Continent were down. Thus, Paris (-0.77%), Frankfurt (-0.36%), Madrid (-0.1%) and Amsterdam (-0.37%) ended in the red. Investors' eyes remain focused on monetary policy, with the Bank of England set to decide on rates on Thursday after UK inflation cooled slightly to +2% year-on-year and +0.3% in May.

The European Commission considers that the opening of an excessive deficit procedure against seven states is justified: Belgium, France, Italy, Malta and Slovakia for the Eurozone and then Hungary and Polona, based on the 2023 accounts closure data. "This is only the first step towards the opening of the excessive deficit procedures," Brussels points out. In light of this assessment, and after examining the opinion of the Economic and Financial Committee, the Commission "intends to propose to the Council to open deficit-based excessive deficit procedures for these Member States in July 2024". And it is only in November, when the package of the so-called European semester of economic governance will be presented, that the Commission will release the country-by-country recommendations, from which will emerge the extent of the fiscal correction manoeuvre that will have to be made at national level in line with the new net expenditure rules. The soft line has prevailed in the transition phase between the old rules and the new ones, which have already entered into force: for the first time, the various stages of the procedure are thus broken up into six months.

At Piazza Affari, the FTSE Mib limited the damage thanks to the resilience of Eni (+0.83%), thanks to rumours on the possible sale of assets in the Ivory Coast, and of b>banks (Intesa Sanpaolo +1.2%), which benefited from still encouraging data on credit quality. Among blue-chip stocks, Iveco (+1.76%) and Leonardo (+1.2%) were also bought, while StMicroelectronics lost 4.67% after the tech sector had been in the spotlight on Tuesday, led by NVidia, which became the largest company in terms of capitalisation. Luxury goods were down (Moncler -1.81% and Brunello Cucinelli (-0.77%) after Golden Goose stopped trading.

Upward closing for the spread between the BTp and Bund. At the end of the day, the yield differential between the benchmark Italian ten-year BTp (Isin IT0005560948) and the German ten-year Bund stood at 154 basis points, up from 149 points at Tuesday's close. The yield on the benchmark ten-year BTp also climbed to 3.94%, up sharply from 3.88% at the previous benchmark.

On the currency market, the euro moved little against the dollar at 1.0744 (from 1.0730 at the close on Tuesday). The single currency is also worth 169.65 yen (from 169.82), while the dollar/yen ratio is at 157.91 (from 157.86). On the energy front, the oil price rose, hitting a seven-week high as auspices for summer demand and ongoing war fears more than offset the surprise rise in US reserves: Brent crude for August stood at $85.79 (+0.54%) and Wti for the same maturity at $81.08 (+0.46%). The price of European natural gas in Amsterdam rose by 2% to EUR 35.4 per megawatt hour.