The financial markets of the Old Continent pass the mid-day mark generally in positive territory, with Milan (+1.6%) and Paris (+1.4%) traveling as the best stock exchanges after the first round of the French legislative elections. Madrid follows, rising by one percentage point, while Frankfurt (+0.3%) and London (+0.2%) remain more cautious, with Amsterdam fluctuating around parity.
The outcome of the vote pushed markets higher because “the chances of an absolute majority for the Rassemblement National of Marine Le Pen and Jordan Bardella have decreased and those for a ‘hung parliament’ that could lead to a technical government have increased”, says Filippo Diodovich, senior market strategist at IG Italia.
“The negotiations between the various political parties to form a front against Rn will most likely also allow to smooth out the most radical political proposals formulated during the election campaign by some political groups, those radical measures especially in fiscal matters, which are typically those that scare the financial markets the most. The reaction of the financial markets in the morning is therefore a mix of technical elements, such as the buybacks of ‘short’ positions, and a bit of political ‘relief'”, concludes Diodovich.
The euro, meanwhile, remains slightly higher against the dollar at 1.075, while the spread between France and Germany is at 74 basis points, its lowest level in two weeks. The decline is mainly due to the rise in yields on German bonds, and so the Italian spread is also falling, oscillating around 150 ‘basis points’.
In Piazza Affari, there is still strong buying on banks, with Mps growing by 6% and Bper by 4.5% on the eve of the expiry of the Treasury lock-up on the Siena-based institution. Unicredit is also doing very well (+4%), with Intesa increasing by two and a half points. Tim is up by 1.8%, while Prysmian is slipping, down by 1.8%.
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