REACTION TESTS IN THE BAG AFTER THE FALL
UNIPOL AND FONSAI INCREASES TO START ON MONDAY
All expected. Except for the dramatic reaction of the markets to the moves of the three governors: the ECB it lowered the reference rate by a quarter of a percentage point and zeroed the interest on deposits in Frankfurt; there Bank of England ha increased its asset purchase program (mainly bonds) by £50bn; there Chinafinally, it lowered its reference rates for the second time in the space of a month. Expansive measures that had the paradoxical effect of triggering sales.
Even Asia, this morning, reacted with a marked decrease to the choices of the governors, including the move by the People Bank of China. Tokyo is down 0,80%, Hong Kong rgisce with a loss of just under half a percentage point compared to Beijing's measures. The situation is such, banking analyst Hao Hong of the Bank of Communications of Hong Kong explains to Bloomberg, that a new intervention will have to be carried out within a few weeks.
THEeuro fell to 1,238 against the dollar, from 1,252. Futures on the US and European stock exchanges did not move much.
Wall Street is also weak in the wake of the losses of banks (JP Morgan – 3,8%, Citigroup -2,8%) linked to the fall in European government bonds. Both the S&P – 0,5& and the Dow Jones – 0,4% were down despite the positive data on the employment trend in private companies. The Nasdaq is in balance thanks also to the Netflix boom +11%, the company that distributes films via the Internet. The anticipated monthly statistics from the Department of Labor are out today.
In Milan, the FtseMib index it closed down by 2% conditioned by the sharp decline of the banks. After touching losses greater than 3%. The index Ibex of the Spanish Stock Exchange it closed down 2,9%. The declines of the other Stock Exchanges were more contained: Paris fell by 1,1%, Frankfurt -0,4%. London was up 0,1%.
But the real victims of the day were government bonds: the yield on the ten-year BTP rose up to 5,95%, from 5,74% in the morning, and the spread with the Bund widened by 26 basis points, returning to share 455.
What is responsible for the reaction to the bizarre appearance of European markets? There ECB decision to cut rates was unanimously adopted by the Governing Council and the German Abi herself described it as 'generally justified'. But this, rather than confirming the unity of views among the members of the eurozone, shows that the situation is getting worse for everyone, "even if we are not like in 2008", said Draghi referring to the collapse of Lehman Brothers. Even if yesterday's crash recalls the fall of the markets after the joint action of the central banks decided on 8 October 2008.
But it was central bank president Mario Draghi himself who froze the markets by noting that some risks of an economic slowdown "have materialized". Risk D as deflation, therefore, is closer. And Europe is struggling to find effective and shared ways of reacting: neither the state bailout fund nor the bank bailout will have new funds before the ECB's new supervisory powers are ratified. Of course, Draghi reiterated the positive judgment on the recent EU summit during which the foundations were "laid" for the recovery.
Yesterday evening, however, the cold shower arrived from Berlin. 'Did last week's European summit shed more light' on how fiscal responsibility and control could be shared by Eurozone states? – wondered the president of the Bundesbank Jens Weidmann –. My answer is no”. down the banks.
Unicredit closed down by 5,1%, Intesa -4,4%, MontePaschi -4,4%, BancoPopolare -3,2%. Generali lost 2,4%. In Madrid Santander fell by 3,9%, BBVA -4,8%.
Consob said yes the exemption for Unipol from the takeover bid on Milano Assicurazioni, as well as on Premafin and Fonsai. Thus the last obstacle to the 1,1 billion euro capital increase on Fonsai has fallen. Today Consob will approve the prospectuses for the capital increase of Fonsai and of Unipol itself. This morning the board of directors of the Bolognese company, withdrawn from the Fonsai board which met yesterday until late evening, will set the definitive terms of the operation: the Unipol increase, like that of Fonsai, will be held from 9 to 27 July.
Meanwhile, Sator and Palladio have announced that they have appealed against the measure to the Lazio Regional Administrative Court with which Isvap, on 20 June last, authorized Finsoe and Unipol to acquire control of Premafin and Fonsai.
Almost all the Milanese blue chips closed at a loss. Big drawbacks for utilities: Enel -3,29%, Atlantia -2,2% and Enel Green Power -4,18%.
Consistent losses also among the industrial titles: Fiat -1,2%, Pirelli -1,1%.
Among the few rising stocks, Finmeccanica rose 2,2% after rumors of an offer from Siemens for the subsidiary Ansaldo Energia, an offer that would value 100% of the company at €1,3 billion. Finmeccanica's share is 55%. Ansaldo Sts also benefited +3,8%.
Between the mid cap, Telecom Italia Media rose by 2,2% on the news of Michele Santoro's arrival on 'La7'.
The good data from the June harvest gave a boost Banca Generali in rise of 1,9%..
