european stock markets ended the week wiht losses, weighed down by escalating US-China trade tensions and political uncertainty in France, despite a brief rally sparked by positive economic data and a temporary easing of geopolitical concerns. Milan‘s FTSE MIB index led the declines, falling 2.8% over the five trading sessions.
The week began with the unexpected resignation of French Prime Minister Sebastien Lecornu, followed by a surge in market optimism that briefly pushed European indices to multi-year highs – Milan reaching levels not seen since 2007 – and gold prices above $4,000 an ounce.Though, renewed threats of tariffs from the US on Chinese goods triggered a sell-off across both European and US markets. the ongoing US government shutdown entered its second week, adding to investor anxiety.Amsterdam’s AEX index dropped 2.2%, while Paris’ CAC 40 fell 2.0% as France grapples with government formation. Frankfurt’s DAX, London’s FTSE 100, and Madrid’s IBEX 35 experienced more moderate declines of 0.5%, 0.7%, and 0.7% respectively.
European auto stocks were particularly hard hit,with the sector sub-index losing 9.1% amid fears of increased trade barriers. Stellantis shed 5.1% on the Milan exchange, while Ferrari plummeted 19.4% following a disappointing 2030 outlook presented at its capital markets Day.
Oil prices also declined, with Brent crude down 2.1% and WTI falling 2.6%, pressured by concerns about global economic growth and the easing of Middle East tensions. This impacted oil company stocks, including Tenaris, which lost 4.8%. The truce in Gaza also contributed to a 5.2% decline for defense contractor Leonardo.
Conversely,Italgas led gains on the Milan bourse,rising 4.8% following the launch of a divestment process. Utilities Terna (+2.9%) and Snam (+2.3%) also performed well, as did Buzzi (+4.6%) benefiting from a London roadshow. unipol gained 2.5% on speculation of a bancassurance partnership with Unicredit.
On currency markets,the euro weakened by 1% due to the French political crisis. Gold prices,however,rose 2.8% after reaching new record highs during the week.(Radiocor) 10-10-10 18:51 18:56 (0534) 3 nnn
