New wave of sales on European stock exchanges. After a very positive first glimpse of the day, all the financial markets of the Old Continent have turned sharply down with energy and basic resources, the only sectors able to dodge sales. The Ftse Mib went from a maximum at the start of 25,630 points to squander around 800 points in just over an hour, currently yielding over 2.4% to 24,792 points. Over -2 percent also for DAX in Frankfurt and Cac 40.
The main European equity indices, the Euro Stoxx 50 and the Dax travel in corrective territory with over -10% YTD. The Ftse Mib also recorded a double-digit decline (over -11%) compared to the relative highs of 28,162 points reached on 5 January.
What is worrying is the stalemate of the Ukrainian crisis. The talks between Russia and Ukraine held yesterday failed to reach a breakthrough for the ceasefire and the two sides did not say when a new round of negotiations would take place. The Russian ruble stabilized today after yesterday’s record collapse, while the Moscow Exchange remains closed for the second day. There are concerns among traders that Russian equities and bonds may be pushed out of major investment benchmarks as they are increasingly difficult to trade.
Male Moncler and Intesa
Among the individual stocks on Piazza Affari, the worst ones today are Moncler (-5%) and Intesa Sanpaolo (-4.3%). Unicredit was also down (-1.74%) with S&P Global Ratings which has cut the rating on four Russian banks including UniCredit Bank AO, controlled by Unicredit Group.
Among the blue chips of Piazza Affari, today the focus is also on Stellantis (-2.9%) who will present its long-term strategic plan at 2 pm. ENI (+ 0.77%) and Leonardo (+ 1.4% 9 are among the few titles to travel on the rise TIM (-1.3% to € 0.373) with the return of rumors relating to the negotiation underway with CDP for the signing of an MoU for the construction of the single network. According to the newspaper Repubblica, the agreement is unlikely to be ready to be announced with the company results (to be published tomorrow evening), but it should be closed anyway in the coming days.
Instead, government bonds run
Instead, you are buying bonds with the BTP which continues its strengthening phase on the prospect of an ECB that will wait longer before raising rates in light of the current geopolitical tensions that risk impacting the economic situation in the short term. This morning, the BTP-Bund spread fell below 150 bps to the lows of almost a month and about 27 bps below the relative highs reached on February 24 at 176 bps. The yield on the ten-year BTP fell by around 1.6%. In the last two sessions, yields have fallen by 25bps.
Money markets reduce bets on ECB rate hikes (the OIS market returned to pricing only one rate hike at the end of 2022) after some of its exponents said they were in favor of a gradual normalization of monetary policy. Olli Rehn, governor of Finland’s central bank and ECB board member, said the war in Ukraine could lead to stagflation, while Fabio Panetta believes the ECB must act cautiously to avoid triggering market turbulence and stifling economic recovery.