Stock market: another sharp fall amid a bond market storm; Milan brings up the rear (-2.2%)
(Il Sole 24 Ore Radiocor) - European stock markets were in the red at the close of the first trading session in October, marked by fears of global inflation – driven by oil prices – and government bond yields at levels not seen for decades, from US Treasuries to UK Gilts, with the Italian spread surging to around 118 points. This led to a slide in indices on both sides of the Atlantic, as analysts now anticipate a scenario of higher interest rates lasting longer than expected, whilst there are no signs of a de-escalation in the geopolitical crisis in the Middle East that might mitigate the ongoing energy shock. Micron’s better-than-expected revenues and forecasts did little to help; for a moment, it seemed as though the company might be able to prop up the indices, although the European tech sector held up until the end (despite the Nasdaq’s decline).
On the Milan Stock Exchange, the FTSE MIB index was the worst performer in Europe, falling further towards the close to end the day down 2.2 per cent. As in the rest of Europe, selling pressure targeted the major banks, such as Mediolanum (-4.3%), Mediobanca (-4.2%), UniCredit (-4.1%), Banco BPM (-3.6 per cent) and Intesa Sanpaolo (-4 per cent). Almost all shares on the main index lost ground, from insurance to the automotive sector, including telecoms and utilities. Among the few to escape the fall were Fincantieri (+2.7 per cent), buoyed by expectations regarding European defence spending, ST (+0.7 per cent) and, among oil and gas companies, Tenaris (+0.5 per cent). Outside the FTSE MIB, some ‘challenger banks’ took a beating, such as BFF (-10.3%), along with, amongst others, Banco Desio (-6.9%) and Banca Profilo (-6.2%). Energy plummeted by 62% following its application for a negotiated settlement to protect itself from creditors.
On the foreign exchange front, the euro has fallen below the $1.13 mark and is trading at 1.1255 against the US dollar (down from 1.1327 at yesterday’s close), its lowest level since May 2025. The euro/yen stood at 177.06 (178.46) and the dollar/yen at 157.48 (157.55). On the commodities front, gas rose by 2.1 per cent to 73.8 euros per MWh. Finally, some indications regarding supply flows from the Persian Gulf are keeping December Brent at $101 (-2 per cent), whilst WTI rose by 1 per cent to $92 (+2.3 per cent).
Enr-
