Stock market: Crude oil rally holds Europe back once again; Eni keeps Milan afloat (+0.3%)
Brent at $116 per barrel, gas at 94 euros per MWh
(Il Sole 24 Ore Radiocor) - Yet another session of weakness for the European stock markets, with Milan’s FTSE MIB rallying towards the close to finish up 0.36 per cent, buoyed by oil stocks led by Eni, after having risked falling below the 48,000-point mark earlier in the day. And whilst the markets grapple with investors’ risk aversion – fuelled by the challenging geopolitical context and the climate of protest that has spread across Europe – energy commodity prices continue to surge, with oil returning to six-month highs and gas well above 90 euros per megawatt-hour. In detail, Brent is trading at $116.18 per barrel (+2.67 per cent), whilst WTI stands at $102.14 (+2.68 per cent); in Amsterdam, the gas price is 94 euros (+4.4 per cent). Weighing on the market are renewed fears of an escalation between Washington and Tehran, with the New York Times reporting, on the one hand, that President Trump may be considering a new attack on Iran following the mid-term elections, and, on the other, the Revolutionary Guards threatening to widen the regional conflict. Speaking to journalists, the US President also said that the US could end the war with Iran ‘very quickly’. Thus, whilst fears of an inflationary flare-up are reigniting, European bond yields also continue to cause concern, with the French 10-year bond holding steady at the 5 per cent mark, whilst the spread with German government bonds stands at 168 basis points, ahead of Moody’s announcement this evening on France’s public debt.
On the stock market, Eni surged by 5.82 per cent on the Milan Stock Exchange: the share price benefited not only from the rise in crude oil prices, but also from better-than-expected third-quarter results and, above all, the announcement of an extra dividend. However, buying interest is boosting the entire oil sector, with Saipem up 4.17 per cent and Tenaris up 4.51 per cent. By contrast, the tech sector (with ST down 1.21 per cent, Technoprobe down 4.13 per cent and Prysmian down 1 per cent) and the luxury sector remain under pressure. Moncler slipped by 3.18% and Cucinelli by 2%, following Kering’s sharp fall in Paris (-16.6%) after its results. Bringing up the rear on the main index, however, is Stellantis (-6.29%), with HSBC analysts lowering their target price to 3.30 (from 4.00) and maintaining a ‘Reduce’ rating, based on expectations of a ‘weak’ quarter for the group.
In the currency markets, the euro is trading at 1.119 dollars (down from 1.1201 yesterday) and 175.62 yen (down from 176.11). The dollar-yen exchange rate has risen to 156.83 (from 157.20).
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