The Capricorn loses 2% burdened by energy companies and the Italian prosecutor’s office drops 3% at the risk of another government crisis
Final auction for the European stock exchanges. Adding to fears of recession and skyrocketing inflation is now a potential governmental crisis in Italy, after learning that the Five Star Movement will abstain from a major Senate vote, opening the door for Mario Draghi to leave the executive.
The political tensions do not like, let alone, in a market ravaged of economic uncertainties. And if the crisis comes from a peripheral country like Italy, re-triggering fragmentation alarms in the eurozone, investors will be even more cautious.
Given the complex political panorama ahead, the Italian stock market is the one to suffer the most, with declines already close to 3%. In the local fixed income market, there are also sales, with investors shedding transalpine debt, depressing the price of bonds and increasing their profitability (moving in the opposite direction). Specifically, the yield on the Italian 10-year bond shoots up by 8% to 3.47%.
In Spain, the Ibex-35 loses about 2% by playing the 7,800 points. And the 10-year bond is picking up peripheral tensions with interest rates rising from 4.6% to 2.36%.
Within the pick, banks and energy companies are again among the most bearish of the session, with declines of more than 6% for Acciona, 4.4% for Enagás or more than 3% for Solaria, Santander and Repsol. Bankinter and BBVA also fell close to 2.5%, while Sabadell and CaixaBank, which had suffered more in recent sessions, lost another 1.5%.
In any case, we will have to wait until Wall Street opens up to see if this negative behavior continues. Especially as this Thursday kicked off the corporate earnings season, with the major investment banks leading the way.
Bankinter’s analytics department said weak numbers are expected for the sector, “affected by the poor performance of investment banking and trading activity”.
For example, JP Morgan disappointed with a net profit of 8,649 million dollars (8,606 million euros) in the second quarter of 2022, which represents a profit decrease of 27.6% compared to the same period last year.
In the commodities market, the April price of Brent, a benchmark in Europe, fell again to $98, while West Texas fell 1% to $95.2.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
