Stock markets recover after ‘Black Thursday’: Milan up 0.9 per cent. Wall Street mixed; crude oil below $100
The Milan Stock Exchange rebounds on the back of the ‘Risiko’ game, but brings up the rear in the eighth (-1.5 per cent). Quarterly results continue to be released, whilst the spotlight also remains on the Middle East. Brent stands at $96 following yesterday’s surge, but is up 9% over the week
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(Il Sole 24 Ore Radiocor) - The European stock markets are recovering after Black Thursday, partly thanks to a boost from the banking sector, and picked up momentum towards the close. However, the concerns that are currently causing market volatility remain intact, ranging from the stability of AI investments to the Red Sea crisis, via Trump’s tariffs and rising inflation, which could lead to a rise in interest rates. The indices are nevertheless managing to catch their breath, giving the impression of sitting on the sidelines whilst awaiting new developments on the geopolitical front between Donald Trump and Iran, to the extent that crude oil has halted its rally and Brent has returned to $95 a barrel, even though traffic through the Strait of Hormuz remains at historic lows.
Milan thus closed up 0.95% at 51,802 points, in line with gains on other major European markets: Paris +0.8%, Frankfurt +1.3% and London +0.9%. Asian markets were down this morning (Nikkei -2.7%), whilst Wall Street continued to rise slightly. Meanwhile, US President Donald Trump – who is due to meet Israeli Prime Minister Benjamin Netanyahu on Tuesday – has said he will soon make a decision on whether to launch a ‘massive attack’ against Iran. Investors remain alarmed by the new front opened by the Yemeni Houthis, backed by Iran, which is threatening maritime traffic in the Red Sea, fuelling fresh fears of supply disruptions in the Middle East.
Concerns about new tariffs imposed by the US administration remain in the markets, albeit in the background. Washington has announced the imposition of tariffs ranging from 10% to 12.5% on its main trading partners, as part of a new series of trade barriers which, according to the Trump administration, are aimed at combating forced labour.
A mixed week: Milan is the EU’s worst performer
European stock markets have moved at varying speeds over the past week, during which they have had to contend with renewed tensions between the US and Iran, resulting in a halt to the passage of oil tankers and oil prices reaching $100, as well as the challenges facing the big tech firms, which, despite solid financial results, have spooked investors due to the massive investments required in the race for AI. In fact, the indices held up well in the first part of the week before plummeting on ‘Black Thursday’ and recovering only partially on the final trading day. This was not the case for Milan, which, over the best of the five trading days, recorded a weekly loss of 1.5% and was the only market in the red. Frankfurt (+0.1%) and Paris (+0.4%) were also cautious, whilst Madrid (+1%) and, above all, London (+2.3%) stood out on the upside, with London bringing an end to the period of political uncertainty following the appointment of the new Prime Minister, Andy Burnham.
Turning our attention to individual shares on the Milan Stock Exchange, the surge in crude oil prices (+9% over the week for both Brent and WTI) is driving up Eni’s share price (+6.1%), Saipem (+4.9%), whilst the banking sector turmoil is also benefiting MPS (+4.1%). Conversely, it has been a week to forget for St (-13%), which disappointed the market with its guidance, alongside TIM (-6.6%) and Poste (-6.1%), which are grappling with the public takeover bid launched on the telecoms firm by Matteo Del Fante’s company.
