Stock market: Fall in oil prices not enough; defence and luxury sectors weigh on Milan (-0.1%)
Bene St and Nexi; coupon payments weigh on the FTSE MIB by 0.21%
The fall in oil prices is failing to lift European stock markets, in a trading session still dominated by US-Iran negotiations. According to US Vice-President J.D. Vance, the talks in Switzerland have made ‘significant progress’, notably the return of IAEA (International Atomic Energy Agency) inspectors to Tehran, and the US Treasury Department’s decision to lift sanctions on Iranian oil for 60 days. These factors have driven down crude oil prices: August Brent fell by 3.9% to $77.4 per barrel, and the equivalent WTI fell by 4% to $73.4.
Thus, the Milan Stock Exchange (fresh from last Friday’s record high, and with coupon payments weighing on the index by 0.21 per cent) closed down 0.1 per cent at the end of a mixed trading session both across Europe and – so far – on Wall Street. Monetary policy remains in the background, with ECB President Christine Lagarde telling the European Parliament that the central bank currently sees no signs ‘that would justify a more aggressive policy’, following the first interest rate rise in almost three years at its last meeting. For the new Fed under Warsh’s leadership, however, “the balance has clearly tipped towards the risk of inflation”, writes Luca Simoncelli of Invesco.
On the Milan Stock Exchange, the most noticeable headwind is coming from the defence sector: Leonardo (-3.7%), Fincantieri (-3.7%) and Avio (-4.7%) are bringing up the rear, in the wake of the sector’s weakness across Europe. The luxury sector is also in retreat, with Brunello Cucinelli (-3.3%) and Moncler (-3.1%) penalised by concerns over future demand and tourism. Among the gainers, Nexi (+3.3%) and St (+2.1%) stand out, buoyed by the strong performance of the European tech sector and the momentum around AI-related themes. This momentum is also benefiting Prysmian (+1%). Unipol (+1.1%) and Stellantis (+1.4%) also performed well.
Among commodities, TTF gas is down 0.5% at 41.8 euros per MWh. Bitcoin is up slightly at 64,900 dollars (+1.3%). In the currency markets, the euro/dollar exchange rate stands at 1.1439 (down from 1.1468 at Friday’s close); the euro/yen stands at 184.6 (down from 184.9), whilst the dollar/yen stands at 161.4 (down from 164.2).
