Stock market: debt crisis strikes fear once more; Milan (-2.5 per cent) slips below 50,000 points
(Il Sole 24 Ore Radiocor) - European stock markets are once again in the grip of government bond yields, which are causing increasing concern amongst markets already grappling with oil prices above $100 a barrel, higher-than-expected inflation and the geopolitical crisis in the Middle East. These are cause for concern and, in the view of observers, could lead – at least in the longer term – to central banks raising interest rates more rapidly than anticipated. Among the European stock markets, which closed with losses of over 1 per cent, the Milan Stock Exchange stood out negatively, falling by 2.5 per cent and dropping below 50,000 points for the first time since early June. Banks and, above all, the tech sector found themselves in the crosshairs of selling pressure, with the latter feeling the impact of high interest rates given the substantial funding secured so far in the race for AI. There are also fears regarding sovereign debt. In this context, French and Italian government bonds have been hit hardest, with the yield on the 10-year BTp at its highest since October 2023 and the spread at around 115 points (its highest level since April 2025). The situation is no better in the US, where the yield on long-term Treasuries is at its highest since 2002.
On the Milan Stock Exchange, almost all shares on the main index are in the red. Among the few to escape the downturn are Inwit (+1.9%) and Stellantis (+1.4%), whilst at the other end of the scale, the tech sector has seen a slump, with Technoprobe (-6%), St (-4.1%) and Prysmian (-4.7%) all falling. There was widespread selling in the banking sector, with UniCredit (-4.2%) and Intesa Sanpaolo (-4%) losing ground alongside the rest of the banking and insurance sectors. Recordati fell by 0.2% after the CVC and GBL funds relaunched their takeover bid, raising the price to 53 euros per share. Outside the FTSE MIB, IEG plummeted by 12.8% following the placement of 3.4% of its share capital.
On the foreign exchange front, the euro is losing ground once again and is trading at 1.1188 dollars (down from 1.1265 dollars at yesterday’s close), after slipping to a 17-month low in the 1.1160 region. The single currency is also worth 176.87 yen (down from 178.08), whilst the dollar/yen exchange rate has risen to 158.12 (up from 158). On the energy front, gas prices in Amsterdam are up 3.5 per cent at 78.4 euros per MWh, whilst December Brent crude rose to 101.9 dollars per barrel (+1.3 per cent) and November WTI to 89.8 dollars (+0.4 per cent).
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