European stock markets are all in the red, with Paris losing over 2% after the calling of early elections. Losses around 1% also in Frankfurt, Milan and Madrid. The spread rises to 140 basis points, the euro weakens. These are the consequences of the European elections
From political earthquake to financial earthquake. They are all in red European stock exchangesWhile the euro travels in decline and it spread salt. These are the first consequences of the European elections to hit the markets, hitting France and its banks particularly hard, after French President Emmanuel Macron’s decision to call early parliamentary elections by virtue of the electoral debacle and the victory of the transalpine far right.
Euro falling, spreads and government bonds soar
It fallsEURwhich moves at 1.0758 on the dollar, at a one-month low, and at 84.53 pence on the pound, and at a 21-month low.
The spread between BTP and Bund it rises to 139 basis points against 134 on Friday, with the yield on Italian tenth anniversary benchmark which rises to 4.04% from 3.96 the day before.
French bond prices also slide, pushing yields to two-week highs, with the rate onOat at 10 years That it rises to 3.17% after the boom recorded by Marine Le Pen’s far right which became the leading party in France with 31.4%, doubling Macron’s list (14.6%).
“The European context appears fragile and with uncertainty about future governments of France, Germany and Belgium. It is also worth seeing what positioning choices will be made by Giorgia Meloni which will have to decide whether to remain within right-wing coalitions in opposition to the current majority expressed by the European Commission or to support the renewal of the Commission with its parliamentarians”, comment the experts of Intermonte, according to which three issues will be at the center of attention in the near future: the possible “strong watering down” of ecological transition policies which could lead to a revision of the rules on the real estate, automotive and energy efficiency sectors; “an acceleration of investments in the defense sector albeit in a context of less support for Ukraine and more devoted to the protection and defense of EU territory”; a future “more protectionist” attitude on antitrust issues even if it will be necessary to wait for the composition of the new EU Commission.
European stock market in sharp decline, Paris sinks ballasted by the banks
Although the pro-European parties have managed to maintain the majority in the EU parliament, the positive results of the far-right forces in the main European countries are worrying the markets.
In this context, it Stoxx 600 it lost 0.79%, dragged down by the banking sector, in particular by the French one. Paris it is by far the worst stock market in the old continent with a decline of more than 2%. The defeat of Emmanuel Macron’s party and the French president’s decision to dissolve the chambers of Parliament, calling early elections on June 30th, weighs especially on the stocks of the large French banks: BNP Paribas it lost 5.26%, after losing 8% in the early stages. Strong declines also for Crédit Agricole-4.14%, e Societe Generale-7.25%.
The other price lists are in red: Frankfurt marks -0.97% after the boom of the Christian Democrats, the first political force in the country with 30% of the votes and the overtaking of the far right Afd (16%) to the detriment of the SPD, with Chancellor Olaf Scholz’s party collapsed at 14%.
TO Madrid (-0.93%) the center-right Popular Party (34.2%) beats the socialist party of Prime Minister Pedro Sanchez (30%), while Brussels drops 1% after the resignation of the Belgian head of government Alexandre De Croo in light of the results of the national legislative elections which were held together with the consultation for the European Parliament. It holds Amsterdam (-0.5%) where the Labour-Green alliance led by Frans Timmermans won at Europe, beating the far right of Geert Wilders.
Milan loses 1%, but “Italy is the most stable”
There stability of the Italian government, which emerged from the polls of the EU vote, and the strengthening of the bipolar system (given the simultaneous growth of consensus for the Democratic Party) represent “positive indications for the government and for the Italian market which in the past has suffered from the instability of governments while today it appears very likely that the current coalition will reach the end of the legislature”, underline the Intermonte analysts in the aftermath of the vote for the renewal of the European Parliament. Despite this, Milan is also affected by sales, with the Ftse Mib which loses 1.04% 34,301 points.
On the main list there are only 5 positive titles. Pink shirt is Leonardo (+1.28%) with the markets increasingly supporting the possibility of acquiring the Defense Vehicles division of Iveco (-2.13%). Also pushing the stock higher are the words of CEO Roberto Cingolani who, in an interview with The messenger, reiterated the need for aggregations or joint ventures for the European defense sector. Regarding the possible operation on Iveco, Cingolani defined it as “a premature scenario”. The utilities are also saved: Hera (+0.71%), Italgas (+0.08%) Snam (+0.05%). Tenaris rises by 0.24%.
Instead, Mib places itself at the bottom of the Ftse Brunello Cucinelli (-2.81%). Heavy Telecom Italia (-2.11%), while among the worst stocks are those that also deal in Paris: Stm (-2%) e Stellantis (-1.57%). The banks ballasted by the French “sisters” are in red: Bpm bench (-1.87%), Mediobanca (-1.71%) Intesa Sanpaolo (-1.67%), Unicredit (-0.83%)
Out of the main basket, spotlight on Saes Getters +1.65% with the increase in the price of the total public takeover offer, promoted by SGG Holding, from 26.3 to 28.0 euros for each Saes Getters share.
Oil slightly rising
The prices of petrolium rising slightly, supported by hopes of an increase in fuel demand this summer. However, the momentum is being held back by the strengthening of the dollar following the reduction in expectations of an imminent cut in US interest rates. At 12.20 Brent futures rose by 0.1% to 79.7 dollars a barrel. US WTI crude futures advanced 0.05% to $75.3. The price of the product has changed little gas natural gas traded on the Amsterdam platform at 33.1 euros per megawatt hour.
