Piazza Affari begins the week in negative territory in a scenario that remains marked by caution after the latest developments in the conflict between Russia and Ukraine. In Milan, the Ftse Mib index started the day in the red, and at this moment it is indistinguishable by about 2% at 25,276.94 points.
“The escalation of tensions, after Putin ordered the alert of the nuclear deterrence system, keep the markets on a razor’s edge. We will likely see another week characterized by volatility and sudden changes of direction following the news, in which will require particular prudence and rigorous risk management “, warns Pietro Di Lorenzo, founder of Sostrader.
The bankers led by UniCredit, which sells about 7%, are sinking, followed by Intesa Sanpaolo, which leaves about 5% on the parterre. Reductions of over 4% for Pirelli and Stellantis. Among the best stocks, Leonardo’s rally stands out (now in the volatility auction, last price at € 7.926 + 14%). Equita analysts report that Germany has announced a significant increase in military spending in response to the Ukraine-Germany situation. “Leonardo has a modest direct exposure to Germany mainly through the 25% stake in the German Hendsoldt acquired last year”, they underline from Equita adding that “after the 21% rebound in the last week, at current prices the stake represents 10 % of the market cap, (equal to less than 400 million against the 600 million of the entry price) “. Tenaris also did well, rising by almost 2% thanks to the support of oil prices which jumped by more than 4%.
Under the lens of the markets, the imposition of tougher sanctions against Vladimir Putin’s Russia imposed by the West as a response to the invasion of Ukraine. Yesterday the European Union, the United States, Great Britain and other Western nations agreed to cut some Russian banks out of the SWIFT international payment system and impose restrictions on the Russian central bank. Meanwhile, today at a macro level, the US trade balance, the Chicago manufacturing index and that of the Fed Dallas are highlighted today. For central banks, the Panetta speech of the ECB and that of Bostic of the Fed (non-voting) were highlighted.
By the end of last week, European markets had raised their heads at the possibility that central banks were revising their recent monetary policy plans in light of the Russia-Ukraine war. Led by President Christine Lagarde, the Eurotower met in an emergency meeting on Thursday to discuss any adjustments it will have to make to euro area monetary policy in the wake of the war.