Stock market: renewed US-Iran tensions send markets into turmoil, but Milan holds its ground as oil prices surge
At the close, the FTSE MIB was down 0.01 per cent; August’s balance was up 0.9 per cent
(Il Sole 24 Ore Radiocor) - Dark clouds are gathering over the markets once again, as renewed US-Iran tensions send share prices into a tailspin. Fears of a military escalation are compounded by concerns over inflation, due to crude oil prices surging above $90, with the risk of accelerated interest rate rises by the Federal Reserve and the ECB (amplified by Fed Chairman Kevin Warsh, who had already struck a ‘hawkish’ tone at Jackson Hole). The resurgence of the conflict between Washington and Tehran comes after a month described by analysts as ‘low-intensity’, given that the standoff in August had shifted to the economic front, whilst the current rhetoric appears to be turning the clock back to the most critical phase (including for oil tankers in the Strait of Hormuz). The other flashpoint – this time trade-related – is with China, regarding which US Treasury Secretary Scott Bessent has called on G20 partners to review the terms of their agreements with Beijing.
Against this backdrop, the Milan Stock Exchange closed flat (-0.01 per cent), bringing its August performance to +0.9 per cent. It was a month in which the main indices across Europe closed with mixed results (Frankfurt leading the way, Paris bringing up the rear) following weeks of grappling with pressure on government bond yields, geopolitical crises and ongoing doubts about the resilience of the tech sector. Turning to the latest trading session, the big oil companies Tenaris (+3%), Saipem (+2.3%) and Eni (+2.3%) – buoyed by imminent agreements in Venezuela on future energy projects – led the gains on the Milan stock exchange, following the rise in crude oil prices. In the banking sector, MPS (+1.5%) was the best performer, whilst the defence and aerospace sectors brought up the rear, with Avio (-2.9%) and Leonardo (-2.2%). Outside the main index, Banca Ifis slipped (-5.6%).
In the currency markets, the euro rose to $1.161 (from $1.160 at Friday’s close) and 185.58 yen (185.43), whilst the dollar/yen exchange rate stood at 159.77 (160.03). Bitcoin fell to $78.357 (-0.3%). In the commodities market, spot gold remained weak at $4,433 per ounce (-0.6%), whilst gas prices rose to €69.9 per MWh (+4.5%). The November Brent futures contract rose to $90.4 per barrel (+1.2 per cent), whilst the October WTI contract rose to $85.3 (+2.4 per cent).
Enr-
