The European stock exchanges close little moves in a climate of uncertainty in the aftermath of another black Monday: the Ftse Mib closes up by 0,27% to 19.029, the Dax rises by 0,07%, the CAC drops by 0,66 % and the Ftse 100 by 0,08%.
After an upward start, the European indices turned negative on new fears for the strength of the eurozone triggered by the auction of six-month BOTs which saw yields rise. The eurozone must implement the plan to tackle the debt crisis "rapidly", urged the managing director of the International Monetary Fund Christine Lagarde. In fact, the yield on six-monthly Bots rose to its highest level since November 2008 at 2,269%.
The Treasury sold 7,5 billion semi-annual bots against a demand of over 11,7 billion. 1,5 billion euros of Ctz were also sold in April 2013 against a demand of 2,485 billion, with a yield of 4,038%, the highest since September 2008. The coverage ratio worsened to 1,561 due to the Bot auction (1,721 in June ) and to 1,657 for the Ctz (from 1,87).
After the Italian auction, the spread on ten-year Italian BTPs widened, reaching 300 points before returning to around 285 basis points. The climate of opposition on the other side of the Atlantic does not help. President Barack Obama will oppose his veto to the Republican plan to increase the debt ceiling for six months, reported today the director of the National Economic Council of the White House, Gene Sperling according to which there is a part of Republicans Chamber which is blocking a compromise on a balanced plan which would result in an increase in the debt ceiling and avoid default.
According to the trade association International Swaps and Derivatives Association, the United States would have at least three days to deal with the failed repayments on government bonds before the process is triggered which charges the derivative contracts 'credit default swap', insurance against the risk of sovereign insolvency.
In this climate, several better-than-expected quarterly reports were not enough to give Wall Street momentum, including Ups and Ford. The indices started off weak and now the Dow Jones is also moving mixed, down by 0,52. Also weighed down by mixed macroeconomic signals, with consumer confidence rising slightly and new home sales falling more than expected.
In New York, oil opened up 0,6% at 99,76 dollars a barrel while the dollar hits a new all-time low against the Swiss franc and is losing ground again against the euro, which climbs back to 1,45.
Piazza Affari recovers from the losses of the morning, after the Bot auction had weighed down the lists after a good start. Bankers recovered but closed in contrast. Unicredit was the best stock during the day with an increase of 4,41%. Intesa Sanpaolo (+3,11%), Banca Mps (+2,55%) and Mediobanca (+1,46%) also did very well. Banco Popolare rises by +0,77%), and Ubi by 0,06% while Bpm drops by 1,49% A volatile day for Fiat which closes down by -4.46%: today it released its second quarter results (net profit equal to 1.237 million euros) in line with analysts' expectations and raised the guidance.
But industrial stocks generally fared poorly, such as Pirelli (-3,66%) and Finmeccanica (-3,81%). Ansaldo Sts closed down by 5,15% after the publication of the accounts in which it lowered the 2011 guidance on revenues and profitability. Stm sinks with a plunge of 11,51% in the aftermath of the release of the quarterly accounts which turned out to be worse than expected, with Cheuvreaux and Exane which today reduced the rating to underperform. On the other hand, it was a positive day for the eyewear stocks. Marcolin closes up 2,04% and Luxottica closes up 0,76% thanks to results above expectations.
