The European stock exchanges are racing, indeed galloping a few hours after the announcements on rates arriving from the Fed. Piazza Affari, preceded only by Amsterdam (+3,6%) rises by 3,3% at 13 pm, the index jumps to around 24.300 points, the spread is reduced to 152 points: the search for safe havens decreases, so that the German Bund rises to +0,39%, the highest yield for four years.
The sudden awakening of Taurus it is the result of the combination of several factors. The first push, as unexpected as it is robust, came from the East: China has announced that it will adopt further economic stimulus measures, an intervention that bodes well for an active role of Beijing also in the search for a solution in the Ukrainian tragedy. The Xinhua agency reported that Liu He, Xi Jingping's top economic adviser, said the government intends to move to "coordinate the fight against the pandemic with economic growth while guaranteeing the protection of the capital market". Above all, it was the technological sector, the most depressed in recent days in the face of the risk, apparently averted, of stricter rules for Chinese companies listed in the USA.
- Hong Kong closes the evening session with a 9% increase. The Chinese tech index gained 20%, a record rise, and the US-listed giants are flying in the pre-market (Alibaba +18%, Baidu +14% and Didi Global +35%).
- The thrust of the Dragon has given wings to the European technological sector while the Nasdaq, where the rally had already started yesterday evening, promises a very brilliant opening.
- In Milan the best title is Stm +7%, in Amsterdam Asml rose by 4,44% and in Frankfurt Infineon Technologies grew by 4,51%. To give further impetus is the news of the start of the first phase of investments in Europe by Intel (33 billion) of which up to 4,5 billion in Italy.
Stock market euphoric, is a compromise approaching for Ukraine?
The second positive element is the stalemate in the Ukrainian crisis. Glimmers of compromise seem to be approaching in Ukraine. Peace is approaching, or at least a truce. Russian Foreign Minister Sergei Lavrov said today that some formulations of agreements with Ukraine are closer. Lavrov added that peace talks with Ukraine "are not easy", but "there is hope for a compromise". Next week, US President Joe Biden will make his first visit to Europe since Russia invaded Ukraine, to discuss the crisis with NATO allies, as communicated by the White House.
- These signs of easing made possible the rebound of luxury, automotive and finance companies. Moncler +6,7%, Safilo +7% recover.
- The Big Bankers are making a great start: Unicredit, launched upon leaving Moscow, and Intesa both gain between 6 and 7%, Bper +5,41%.
- Generali also shows strong growth +4,59%
- Ferrari +3,7% and Stellantis +3,6% are running. In Frankfurt BMW rises +3% despite the house has cut the estimates for the closure of activities in Russia.
Worth noting is the thud of Mediaforeurope -11%, which approved a takeover bid on the minority shares of the Spanish subsidiary Mediaset Espana at 5,613 euros per share, or 1,86 euros in cash plus two MediaForEurope A ordinary shares for a value of 3.753 euros.
Stock market euphoric: the drop in oil and gas contributes
Last but not least, another factor favoring the rise in price lists is the drop in oil and natural gas prices -4% in Europe to 110 euros per MWh, last week it cost three times as much.
- The decline in raw materials allows manufacturing companies a shot in the arm: Interpump increases by 6,35%.
- On the other hand, energy stocks held back: Tenaris -1,6%, Eni -0,5%. Italgas also slows down -0,66%.
- Defense stocks are also down. Leonardo drops by 1,3%
Brent falls below the one hundred dollar level, down 0,5% to 99 dollars after the overnight ups and downs. Boris Johnson has arrived in Abu Dhabi, the first stage of his mission in the Persian Gulf, which will continue in Riyadh. The trip's goal is to convince the United Arab Emirates and Saudi Arabia to pump more oil to calm the markets shaken by the Russian invasion of Ukraine. The British prime minister said the visit also included increasing investment in green energy in the UK. Saudi Arabian group Alfanar, for example, recently announced a £1 billion investment in a waste-based aviation fuel project.
Mohammad Bin Salman, annoyed by Biden's criticism of the recent executions (81 dead) and the assassination of Adnan Khashoggi, did not respond to the US appeal to increase oil production, but could treat the British guest better. Meanwhile he announced that China will be able to pay crude oil in yuan instead of dollars.
The picture is still disturbed by today's deadline for the payment of 117 million coupons on two dollar-denominated Russian bondsi: the Russian Finance Ministry has started the payment procedures and can also use the 30 days of grace to respect the commitments but for Fitch a payment in rubles would be considered a default event.
