(Il Sole 24 Ore Radiocor) – European stock markets are showing mixed trends, with oil prices rising and tensions in the Middle East remaining high, and in the wake of a Fed decision that came as no surprise (albeit a divided one) and postponed a potential rate rise until September. Investor sentiment is being weighed down by the previous day’s falls on Wall Street, where tech shares have been under pressure for five consecutive sessions amid concerns over AI spending. Also in the spotlight is the earnings season, in full swing on both sides of the Atlantic, with ‘mixed’ results from Microsoft and Meta (the former positive, the latter below expectations). On the macro front, the Bank of England’s interest rate decision is due at midday, with no changes expected.
Thus, the FTSE MIB in Milan and the DAX 40 in Frankfurt, whilst the CAC 40 in Paris is performing better.
Campari soars in Milan, Stellantis plummets after results
On the Milan Stock Exchange, quarterly results are setting the pace for the share market. Stellantis is plummeting at the bottom of the main index following its results, which nevertheless showed a return to profit. In contrast, Campari surges thanks to better-than-expected results and an upward revision to its EBIT margin guidance. Buying was also seen in Buzzi and Nexi , following the release of its quarterly results. This is not enough for Prysmian’s record results and raised targets are not enough, with the share price, according to CEO Massimo Battaini, currently reflecting profit-taking following the rally.
Crude oil continues to rally, but natural gas slows down
The renewed tensions in the Middle East continue to fuel the rally in crude oil, with Brent trading above $92 a barrel and WTI at around $85. Uncertainty remains over the Strait of Hormuz, after US President Donald Trump said on the eve of the announcement that he intended to ‘strike hard’ at Iran, in response to attacks on US forces in the region. Meanwhile, the Houthis have reiterated to certain Qatari media outlets that they do not intend to impose transit fees in the Bab al-Mandeb Strait, and that their activities are “limited solely to blocking Saudi ships”. Meanwhile, gas prices in Amsterdam are falling, trading below 60 euros per megawatt-hour. The euro/dollar exchange rate stands at 1.14.
Spreads on the rise; yields also climb above 4%
The spread between BTp and Bund is widening: the yield spread between German and Italian 10-year bonds stands at 84 basis points, up from 83 basis points at the close the previous day. The yield on the benchmark 10-year BTp is also rising, returning above the 4% threshold, to 4.02% compared with 3.98% at the previous close.