The European stock exchanges accelerate at the end of the morning after a very strong opening: around 12.30 they travel towards a 5 percent rally in Milan, Paris and Frankfurt (while London has more contained increases) and this both on the sharp drop in gas prices and on the glimmers – at least according to official statements – of positive developments in the crisis in Ukraine. Gas drops by 18% to 175 euros per MWh around 12 noon on 9 March at the Ttf in Amsterdam after peaking at 295 euros on the morning of 8 March, also driven by the‘hypothesis of an EU maxi bond to finance energy and defense costs. On the Ukrainian front, Moscow said it knows new talks with Kiev. Russia (today considered by the international agency Fitch to be one step away from default) does not want to overthrow the government of Ukraine. This was stated by the spokeswoman of the Russian Foreign Minister, Maria Zakharova, who also stressed that there had been progress in the negotiations.
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The glimmers in Ukraine and energy autonomy from Russia
I’m hopes for peace talks to support the stock exchanges, with the possibility of meetings in a third country to bring about a relaxation of the situation in Ukraine. The stock markets are rising due to a mix of factors – he explains Giacomo Calef, country manager Italy of NS Partners – including the small glimmers on the front of the war in Ukraine. But they are also rising because raw materials, especially agricultural and energy ones, are falling a little today because Europe has declared that it is able to ease its dependence on Russia and this is a breath of fresh air. Then there is also a component of technical rebound.
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The headlines in Piazza Affari
Milan at the end of the morning shows a consistent rise, over 4.7 per cent. Piazza Affari had been among the most penalized stock exchanges in Europe since the start of the Russian invasion, on Wednesday instead among the best together with Frankfurt, with banks confirming themselves at the forefront of supporting the list, in addition to Pirelli (here the quotes in real time). Auto, insurance and travel are the preferred sectors for investors. Shot by Unicredit (+ 8.2%): in a note released on Tuesday evening, he clarified his exposure in Russia and estimated that in the event of the worst scenario, with the zeroing of the exposure, the impact on Cet1 (200 bp) allows the bank to confirm the cash dividend and the plan for the purchase of treasury shares. In the wake of Intesa Sanpaolo rises (+ 4.3%). Well Pirelli (+ 4.4%) and managed savings (+ 4% Banca Generali, Banca Mediolanum, Finecobank, + 3.8% Poste Italiane).
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A technical rebound too
According to Carlo De Luca, investment manager of Gamma Capital Markets, the market is now rebounding also for technical reasons. We are seeing closures of open short trades in the past two weeks, she comments. The violent correction of the last 14 days attributable not only to the “unloading” of portfolios but also to deleveraging (On Monday 7 March the Dax touched a crucial support – 12,500 points – so that the market can maintain a long-term positive trend, a level where the algorithms begin to automatically close the selling positions and buy back regardless of the fundamentals). In fact, on Monday the heavy losses of the morning then eased a lot in the afternoon, thus signaling a bottom level for the European stock exchanges. From here we believe a very strong technical rebound can start in the next few days, although we cannot yet speak of a trend reversal.
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Asia struggles: the Norwegian fund depresses China
If Europe is running, the Asian stock exchanges are struggling; in China, Shanghai and Shenzen show a marked decline between concerns about the trend of energy commodities and also the case of the Li-Ning sportswear company on which the sovereign fund Norwegian withdrew investments due to suspected human rights violations.
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Russia and imminent default
The ruble, however, slipped further after yet another cut in the rating on Russian sovereign debt by Fitch, a cut that coincided with the reopening of the Russian currency market. The exchange rate between the dollar and the ruble rose by 8% to 113.9 compared to Friday’s values. On international platforms, the Russian currency trades at 127 for one dollar and at 140 for one euro. The international agency Fitch downgraded the rating of the Russian Federation from B to C due to the impact of sanctions on the national economy. For the rating agency the risk of a default by Russia on imminent sovereign debt.
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