Banking well on Mib; eyes on Fed minutes tomorrow

(Alliance News) - The major European stock markets opened flat on Monday, with investors starting the day preferring a cautious approach after last week's gains that marked "a significant change" in market sentiment regarding the Federal Reserve's rate hike expectations, as commented by Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank.

Thus, the FTSE Mib is down 0.1 percent to 29,469.65, the Mid-Cap advances 0.5 percent to 41,944.24, the Small-Cap is up 0.1 percent to 25,954.09, and Italy Growth rises 0.2 percent to 7,728.77.

London's FTSE 100 gives up 0.4 percent, Paris' CAC 40 rises with 0.3 percent and Frankfurt's DAX 40 is just below par.

The latest update of the Consumer Price Index revealed a slower-than-expected inflation rate in the U.S. and policy avoided a government shutdown but "despite these factors, the yield on the U.S. 2-year bond tested 4.80 percent for the fourth time, while the yield on the 10-year bond fell briefly below 4.40 percent. The term premium on the U.S. 10-year bond, which rose 50 basis points the previous month due to the Fed's aggressive expectations, political risks and increased supply of government bonds, has almost vanished during the recent rally. This suggests that, at current levels, investors may need renewed conviction to sustain the buying momentum," Ozkardeskaya added.

Attention is now focused "on the auction of 20-year U.S. bonds. The outcome could influence a potential rebound or continuation of the rally in U.S. bond yields."

"The minutes of the Federal Reserve's latest policy meeting, scheduled for tomorrow, are likely to emphasize that the Fed's decision to suspend rate increases was influenced by the rise in U.S. long-term yields in October. With the resulting drop in yields, interpretations may vary, signaling the Fed's caution because of falling yields or a belief that inflationary pressures have subsided, leading to a suspension of rate hikes."

On the main list in Piazza Affari almost entirely tinged with green, the banking sector takes the top spots with Banca Monte dei Paschi di Siena doing best of all with a 2.5 percent rise.

It is followed by BPER Banca and Saipem, in the green by 1.8 percent.

Also doing well is Banco BPM -- up 1.6 percent -- which announced Friday evening that it had completed a new issue of a EUR300 million Additional Tier 1 capital instrument with perpetual maturity and callable "callable" from year five.

At the same time, the bank announced an offer to repurchase a perpetual bond with a total outstanding nominal amount of EUR300 million.

Intesa Sanpaolo and Mediobanca are also seen at the highs, up 1.8 percent and 1.9 percent while UniCredit rises 1.3 percent.

Tenaris advances 0.7 percent. Friday evening it reported that it purchased 1.7 million of its own shares between Nov. 16 and 17.

The shares were purchased at an average price of EUR15.7308 for a total value of EUR26.9 million.

Assicurazioni Generali -- at the bottom among the few bearish performers with a 1.1 percent decline -- reported Friday that it closed the first nine months with a net profit of EUR2.82 billion, almost double the EUR1.46 billion in the same period last year.

In contrast, adjusted net income rose to EUR2.98 billion from EUR2.30 billion while adjusted earnings per share increased to EUR1.93 from EUR1.46.

Also in the red were Pirelli and Ferrari, down 0.1 percent. Iveco Group -- minus 0.4 percent -- and STMicroelectronics, down 0.2 percent, close the list.

The Mid-Cap sees Seco and Saras leading the way with gains of 2.3% and 2.1% respectively.

Anima Holding rises 0.5 percent after announcing that it has signed a binding agreement to acquire 100 percent of Kairos Partners SGR from parent Kairos Investment Management.

The maximum consideration agreed for the sale "is equal to the capital surplus--currently estimated between EUR20 million and EUR25 million--over the company's minimum regulatory requirements, subject to possible adjustment depending on the performance of assets under management following the signing of the agreement," Anima specifies in a statement.

Poorly performing Intercos Group and Salcef, which sit on the bottom giving up 0.9 percent and 0.6 percent.

On the Small-Cap, Olidata takes the top spot with a rise of 8.7 percent after announcing Saturday that through its subsidiary Sferanet Srl, it has been awarded the framework agreement - lot 2 - with Terna worth EUR9 million related to the "Supply of Server Racks and ICT Services.

Sferanet will support Terna with technologies and services aimed at consolidating and updating ICT infrastructures, confirming one of the key points of the company's vision: investing in digital through projects dedicated to the Energy world and its evolution.

CY4Gate - up 0.6 percent - announced Monday that it has signed a contract for a cyber security research and innovation activity with a major national high-tech company.

The supply has a value of EUR700,000 for the duration of six months and will involve a team of the company's highly qualified resources to undertake an initial phase of study and research on the protection of interconnected networks and sensors.

On the other side of the list are algoWatt, down 6.1 percent, Eems, in the red 4.2 percent, and Class Editori, which is giving up 3.6 percent.

Among SMEs, Circle -- in the red by 1.7 percent -- reported Friday night that its consolidated production value for the first nine months was EUR9.3 million, up 27 percent from the first nine months of 2022 when it was EUR7.4 million.

IMD International Medical Devices opens up 4.2 percent after announcing Friday that the board of directors approved the forecast figure as of December 31, predicting consolidated sales of EUR36 million to EUR38 million, down from EUR41.8 million as of December 31, 2022.

Health Italia opens down 1.7 percent. It reported Friday that revenues in the first nine months stood at EUR25.1 million, in line with EUR25.3 million in the same period last year.

Innovatec -- in the green by 1.2 percent -- reported Friday that it ended the first nine months of the year with revenues down to EUR149.9 million compared to EUR222.3 million in the same period of 2022. The decrease, the company explained, reflects the reduction of the 110 percent ecobonus business as a result of regulatory and financial stop-and-goes that have occurred since the second half of 2022.

Tecma Solutions does best of all and opens up 15 percent, followed by MeglioQuesto, in the green by 6.9 percent. The company reported Friday that it closed the first nine months with improved accounts, as production value rose 33 percent year-on-year to EUR70.1 million from EUR52.8 million in the same period last year. On the profitability front, MeglioQuesto's Ebitda increased to EUR8.6 million from EUR7.7 million.

In Asia, the Nikkei closed Monday down 0.6 percent to 33,388.03, the Shanghai Composite gained 0.5 percent to 3,068.32, and the Hang Seng closed up 1.7 percent to 17,762.00.

In New York on Friday evening, the Dow closed flat at 34,947.28, the Nasdaq gained 0.1 percent to 14,125.48, and the S&P 500 rose 0.1 percent to 4,514.02.

Among currencies, the euro changed hands at USD1.0926 against USD1.0881 recorded in Friday's European stock close while the pound was worth USD1.2487 from USD1.2422 on Friday evening.

Among commodities, Brent crude is worth USD81.07 per barrel from USD79.86 per barrel at Friday's close. Gold, on the other hand, trades at USD1,977.25 an ounce from USD1,981.25 an ounce Friday night.

Monday's macroeconomic calendar includes, Eurozone construction sector output data, at 1100 CET, German and French short-term bond auctions, and U.S. Treasury short-sale bond auctions, at 1730 CET.

Omer results are scheduled on the Piazza Affari calendar.

By Chiara Bruschi, Alliance News reporter

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