Stock markets: Milan continues to surge, on track for its best half-year (+17.6%) among the major exchanges

(Il Sole 24 Ore Radiocor) - 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 on Friday, 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 drove the global tech sector. As a result, Milan closed the week up 2.6% 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 the FTSE MIB, up 17.6% since 1 January, outperforming even the Nasdaq (+13.2%).

Turning to the week’s performance, only Madrid outperformed the Milan Stock Exchange, rising by 3.1%; Frankfurt (+1.6%) and Paris (+0.8%) also fared well, whilst London lagged behind (-1%), grappling with a deep political and consensus crisis. 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 chairman 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 turmoil in the Italian banking sector driving the FTSE Italia All-Share Banks index up by 6.7%. And indeed, looking more closely at individual shares, the week’s top performers are precisely the key players in the credit sector reshuffle: 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 is also down (-10.2%), although it has recorded a gain of 17.3% since the start of the year, as is Diasorin (-8.9%).

On the commodities front, there has been a plunge in crude oil prices: 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 also fell by 9.5%. On the currency markets, the euro fell by 0.9% against the dollar, whilst spot gold also declined by 1.6% over the week.

During Friday’s trading session, the surge in government bond yields, the lack of guidance from Wall Street (which was closed for a public holiday) and the uncertainty surrounding the future of the US and Iran – following the cancellation of the official signing ceremony for the agreement scheduled to take place in Switzerland – weighed on investor sentiment. The 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 finished up 0.31% at 52,848.