Stock market: US inflation dampens enthusiasm; Milan (+0.7 per cent) holds up, buoyed by banks and the ‘old economy’
(Il Sole 24 Ore Radiocor) - A mixed session for European stock markets, which, after a buoyant morning, saw the mood turn gloomy in the afternoon when higher-than-expected US inflation figures for October reignited fears of a more aggressive-than-expected tightening by the Fed. These signals were offset by oil prices continuing to fall thanks to the winds of peace in the Middle East, allowing the markets to close the session higher, consolidating the previous day’s rebound. As a result, the FTSE MIB gained 0.69 per cent, returning to just under 52,000 points.
US consumer price figures, however, are currently weighing on Wall Street indices. These figures take on particular significance following comments by Fed Governor Christopher Waller, who left the door open to the possibility of a rate rise of up to half a percentage point in December should inflationary pressures persist. “In the immediate term, the markets will probably be wondering whether there will be a 25- or 50-basis-point rise in December,” notes Daniel Siluk of Janus Henderson, who believes the latter remains “a scenario that is difficult to justify”. According to the CME FedWatch, the probability of a 25-basis-point rise stands at 85 per cent, compared with 15 per cent for a half-point hike.
On the Milan Stock Exchange, it is largely the ‘old economy’ and the banks that are propping up the market. Standouts include BPER (+2.9 per cent), UniCredit (+2.4 per cent) and Intesa (+0.6 per cent), whilst the launch of the takeover bid for MPS (+0.9 per cent) draws nearer. BPM (-0.7%) is taking a back seat following yesterday’s rally, as it considers the merger proposal put forward by Crédit Agricole (+1.4% in Paris). Also standing out are Avio (+3.6%), Fincantieri (+3.3%), Leonardo (+2.2%) and Campari (+2.2%). Tech stocks were also up, with Technoprobe (+1.6%) and ST (+1.3%) buoyed by positive signals from Infineon (+1.2% in Frankfurt) and TSMC, as well as the figures from Anthropic’s mega IPO on Wall Street. Bringing up the rear were A2A (-2.5%) on the day of its quarterly results, Stellantis (-3.2%) and Eni (-0.9%), following the fall in crude oil prices.
Oil prices have, however, pared their losses from the day’s lows, following fresh attacks on Riyadh claimed by the pro-Iranian Houthis. January Brent fell by 1 per cent to $91.6 per barrel, whilst December WTI slipped to $86.3 (-0.6 per cent). In the currency markets, following the US inflation figures, the euro/dollar exchange rate fell to 1.1149 (from 1.122 the previous day). The euro/yen stood at 177 (from 177.1), and the dollar/yen at 158.8 (from 157.8).
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