Stock market: selling pressure returns on tech shares; in Milan (-1.3 per cent), Eni holds up thanks to high crude oil prices
New tensions over bonds. Banks are also deep in the red
(Il Sole 24 Ore Radiocor) - European stock markets have got off to a poor start, with falls of one percentage point or more, whilst a combination of AI fears and escalating tensions over oil is once again making itself felt, with share prices down and government bond yields on the rise. Milan’s FTSE MIB index fell by 1.3 per cent, dropping sharply to 49,000; Paris lost 1.11 per cent, Frankfurt 0.85 per cent and Amsterdam 1.10 per cent. Oil prices rose by over 2 per cent, with Brent futures at $111.11 and WTI futures at $99.10, after fresh Houthi attacks in Saudi Arabia fuelled fears of an escalation in the conflict and further disruptions to crude oil supplies. On the bond front, yields are under pressure: the 10-year BTP is yielding 4.57 per cent, whilst the French OAT is yielding over 5 per cent following the postponement of the debate on the Budget Bill, with BTP/Bund spreads at over 150 basis points and OAT/Bund spreads at 164. Tech stocks are under particular scrutiny, having led the overnight reversal following the earnings reports from the first major US tech firms and triggering heavy losses in Asia, with chip stocks under pressure. Meta was rewarded whilst Tesla was penalised in after-hours trading; Lam Research Corp suffered a sharp slide (-7.4%), whilst questions regarding sustainability and returns on investment in AI continue to linger. The Milan stock market is following the general trend, with tech stocks bringing up the rear: -3.8% for Technoprobe, -3.4% for Prysmian and -2.9% for St. Stellantis also performed poorly (-2.9%) following European vehicle registrations, which rose by 4.5% in September compared with the market’s 10% increase. Banks fell across the board, with BPER, Intesa Sanpaolo and Banco BPM losing over 2 per cent. At the top, TIM accelerated (+1%), followed by Inwit (+0.8%), whilst Eni held its ground (+0.6%) on the back of high crude oil prices and ahead of tomorrow’s results. Other oil and utility shares were weak, whilst the market assessed the possibility of a tightening of the IRAP tax in the budget, as reported by *Il Sole 24 Ore*. Moncler, after a strong start, slowed to +0.37% in the wake of its quarterly results, which showed stable revenues.
In the currency markets, the euro rose to 1.1243 dollars (from 1.1225 at yesterday’s close) and fell to 176.58 yen (from 177.42 yen). The dollar/yen exchange rate fell to 157 (from 158.05). In the precious metals market, gold fell to $4,096 per ounce (-1%). European gas prices stood at 88.7 euros per MWh (+1.4%).
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