A negative day for European stock exchanges, at the end of a very busy week for all markets. Milan, which shut down the worst of the last session before the elections: The Ftse Mib index closed down 3.3% to 21,066 points, its lowest level on the day. Among the major stocks in Piazza Avari, the sharp decline of Tenaris (-8.3%) due to weak oil, hurt Leonardo (-6%) with Eni and Intesa selling 4.7%. Among the banks, shares of Iveco were also down (-4.9%), while Intesa-S.Paolo (-4.75%) and Banco Bpm (-4.42%) fell among the banks. And finally, a sharp slowdown for Tim (-4.41%). Sales overwhelmed all sectors, from energy to industry, and from banking to services. Only drugs were saved, with the only stock in the basket Amplifon (+0.77%) showing a slight increase. He also tried to keep Atlantia which lost only 0.3%.
European stock exchanges confirmed losses during the session on the back of recession fears and a weak Euro.or. At the end of the session they all closed sharply: the Amsterdam Stock Exchange closed down 2.7%, followed by Madrid that lost 2.4% and Paris that fell 2.2%. The Stoxx 600 index, which aggregates major European stocks, lost a final 2.37%, which equates to 232 billion euros of capitalization burned in one session. Piazza Afari alone lost more than 19 billion. The London List lost 2% in the final, while Frankfurt lost 1.9%. In particular, it appears that the British market did not appreciate the emergency plan presented by the British government and formalized today in Parliament: A package of measures for the next five years that includes tax cuts To re-launch economic growth and help address the cost of living.
slack shadows
Shadows of stagnation loom over Europe. The Italian government also fears for the next few months. The Italian growth forecast for 2023 estimates a slowdown in GDP by setting it at just 0.5%, or in any case well below 1%, thus registering a sharp slowdown compared to 2022 and compared to the 2.3% projected in April. By the end of this year, GDP growth will instead be between 3.3% and 3.4%, more than the 3.1% estimated. These are the numbers in the update to Def (Nadef) that Mario Draghi’s (now outgoing) government is working on, which should be submitted on September 27. Thus, the bearish outlook is mainly due to the energy crisis that also threatens in 2023 to continue to undermine the world’s economies and fuel uncertainty, with rising inflation. Nadef should arrive with only the trend frame for next year this week and then be sent to Brussels. But the new government will have to deal with a budget law that must be approved by December 31, 2022. The political elections that will take place tomorrow and thus the formation of the new executive risks lengthening significantly, and on the horizon there is a temporary budget exercise. But in the meantime, Istat yesterday revised its estimate of GDP for 2021 upward, to 6.7%, confirming the strong recovery of the economy in 2021, compared to a decrease of 9.0% in 2020. Finally, the European Commission leaked that it finalized its opinion Positive on Italy’s request for the second tranche of $21 billion envisaged by the National Rehabilitation Programme.
Spreads, forex and oil
With the decline of Piazza Avary, the spread increased, the spread on German bonds, which closed at 233 points (In this link, the direction of the spread is in real time), a sharp increase compared to 221 points from the last reference. The return on the 10-year BTP benchmark has also increased significantly, reaching last place at 4.36%, just above the 4.35% recorded in October 2013 (4.19% yesterday’s close).
On the foreign exchange front, the euro is trading at the beginning of trading at $0.9813 (from 0.9824 yesterday at its close), while the yen is at $142.29, having reached its lowest level since December 1998 on the eve of that. – Yen at 139.66 (139.47). A slight decrease in gas to 184 euros per megawatt-hour (-1.9%), as well as oil: West Texas Intermediate crude fell in November to -2.6 percent to $81.33 a barrel, and Brent crude fell to $90.1 (-0.3 percent).
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