Stock market: the bond market truce holds as Wall Street hits record highs; Milan closes up 0.87 per cent
Tech and chips take centre stage again; oil prices fall
(Il Sole 24 Ore Radiocor) - The lull in the bond market and the slowdown in oil prices have buoyed trading on the stock markets today, alongside a boost from the technology sector in the United States, where the S&P has hit a new intraday record. European stock markets all closed higher: the FTSE MIB gained 0.87 per cent and continued its recovery following the slump on the first trading day of the month, triggered by the turmoil in government bonds. Today, yields on 10-year and 30-year Treasuries are down to 5.26 per cent and 5.64 per cent respectively, after hitting a new high since 2002 the previous day. The spread between BTPs and Bunds is also narrowing (105 basis points), with the BTP yield at 4.52 per cent compared with 4.64 per cent the previous day. The French 10-year OAT is down to 4.74 per cent (last night it stood at 4.86 per cent). The market continues to scale back expectations of a Fed intervention as early as its next meeting in October, looking instead towards a possible rate rise at the end of the year. The receding prospect of a rise in interest rates, against a backdrop of heavy investment to support the AI boom, is thus bolstering technology shares and chipmakers. On Wall Street, Marvell Technology soared (by over 7 per cent) after presenting long-term growth targets well above expectations.
On the Milan Stock Exchange, Technoprobe’s upward trend continues (+2.8 per cent), with buying also seen in St (+2.2 per cent) and Prysmian (+1.84 per cent), driven by the US tech giants. Among the banks, MPS (+2.34 per cent) stands out, remaining in the spotlight following the relaunch of Intesa Sanpaolo’s (+1.26 per cent) public takeover bid. UniCredit performed well, closing up 1.64 per cent after Russian leader Vladimir Putin effectively gave the green light to the divestment of part of its operations in Russia. Bringing up the rear were TIM (-3.66 per cent) and Fincantieri (-3.55 per cent). Leonardo (-2.2 per cent) and Avio (-2.6 per cent) also performed poorly, as did oil stocks.
On the energy front, the price of oil continues to fall due to increased crude oil flows from the Middle East and the release of strategic reserves by G7 countries. November WTI is down 1.8% at $87.8 per barrel, whilst December North Sea Brent stands at around $98, down by around 2%. Gas prices in Amsterdam, however, are up at €76 per megawatt-hour (+3.6%). In the foreign exchange market, the euro is edging up to $1.1265 (from $1.1219 at the open and $1.1216 at yesterday’s close), after slipping to a 17-month low around 1.1160. The single currency is also trading at 178.08 yen (from 177.43 at the open and 117.18 yesterday). The dollar/yen exchange rate stands at 158 (from 158.15 and 157.97).
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