(Alliance News) - European stock markets opened sharply lower Friday--with the Mib breaking support at 34,000 points--due to escalating tensions in the Middle East and recalibrating investor expectations on Federal Reserve rate cuts.
Concerns about the possibility of a wider conflict in the Middle East region have increased following Israel's preparations for a potential retaliatory strike by Iran, following the Israeli airstrike on the Iranian embassy earlier this week.
Minneapolis Fed President Neel Kashkari suggested that rate cuts may not be warranted this year if inflation persists in its stagnation. The spotlight now shifts to the long-awaited U.S. jobs report, to be released today, which may or may not make possible a first Fed rate cut in June.
Indeed, confidence in three rate cuts by the Federal Reserve for this year, starting in June, is being tested by a number of recent data points indicating that the U.S. economy remains healthy.
The Minneapolis Fed chief said Thursday that there is likely to be no reduction this year, calling January and February inflation data "a bit worrisome" and adding that he wants to see more positive data.
His Philadelphia counterpart, Patrick Harker, warned that prices are still rising too sharply and that "we're not where we need to be," while the head of the Richmond office, Thomas Barkin, called it "smart" to take time to get a clearer idea of the path of inflation.
Thus, the FTSE Mib trades 1.5 percent red at 33,923.92 points.
In Europe, Paris' CAC 40 is marking a 1.2 percent loss, London's FTSE 100 is giving up 0.9 percent, and Frankfurt's DAX 40 is marking a 1.2 percent loss.
The Mid-Cap is giving up 1.0 percent to 47,543.13, the Small-Cap is in the red 0.9 percent to 28,500.38, while Italy Growth marks a minus 0.6 percent to 8,121.73.
On the Mib, sales on the banking sector, with Intesa, Banco BPM and Banca Monte dei Paschi giving ground in a range of 2.2 percent to 2.6 percent.
Generali opened trading 1.1% in the red at EUR22.90 per shareer. Of note, Barclays raised its target price to EUR20.50 from EUR20.00.
Terna - in the red by 0.7 percent - announced Wednesday evening that it had successfully launched a green, fixed-rate, nonconvertible hybrid subordinated perpetual bond issue denominated in euros for institutional investors with a total nominal amount of EUR850 million.
Eni's board of directors -- up 1.7 percent -- approved the possible issuance of one or more bonds, to be placed with institutional investors, for a total amount not exceeding EUR5 billion, to be issued in one or more tranches by March 31, 2026. The board also resolved to distribute to shareholders the fourth of four tranches of the 2023 dividend disbursement, from available reserves, of EUR0.23 - out of a total annual disbursement, in lieu of dividend, of EUR0.94 - for each share outstanding on the ex-dividend date of May 2024, with payment on May 22.
On the MidCap, Caltagirone advances, posting a plus 1.1 percent among the minority of bullish traders, on the heels of the eve's close with a plus 3.9 percent.
Ariston Holding, on the other hand, is giving up 2.0%, on the heels of Thursday night's 0.8% decline.
The Italian Sea Group opened by giving up 2.6 percent, currently positioning itself at the tail end with price at EUR9.47 per share, in its fourth bearish session.
Rear-ends also on Banca Polkare di Sondrio, which gives up 2.0% to EUR6.83 per share in the wake of Thursday evening's 2.5% red.
On the SmallCap, selling - among others - on Met.Extra Group, which marks minus 4.3% with nuvo price at EUR2.66 per share.
Guglielmo Marconi Airport in Bologna opened trading down 0.2 percent. March was another month of growth with passengers up 9.4% year-on-year to 739,284.
Aeffe is advancing, which is leading the price up 1.2 percent, on the heels of the same gain recorded in the eve.
Piquadro, on the other hand, advances 1.0 percent, following up on two previous bullish candles.
Among SMEs Cofle advances 3.5% bringing the price to EUR6.00, breaking the five-session downtrend.
NVP - flat at EUR2.92 - reported Friday that it ended the first quarter with revenues of EUR7.2 million, up 20 percent from EUR6.0 million recorded in the same period of 2023. The scope of consolidation includes EG Audiovisivi Srl and Produzione Italia Srl, which contributed EUR1.0 million in revenues, entirely generated in Italy.
The board of Esautomotion - up 2.3 percent - on Thursday evening approved the draft consolidated financial statements for 2023, closing with a net profit of EUR4.3 million, down from EUR5.1 million in the previous year. The board also proposed the distribution of a dividend of EUR0.05 per share, down from EUR0.1 in the previous year. Total revenues were EUR35.6 million, up from EUR34.0 million in the previous year.
CY4Gate, on the other hand, posted minus 2.7 percent, after two sessions among the bearish.
In New York overnight, the Dow Jones and Nasdaq lost 1.4 percent, while the S&P 500 gave up 1.2 percent.
In Asia, with Chinese stock exchanges closed for holidays, the Nikkei gave up 2 percent, while the Hang Seng is picking up 0.1 percent.
Among currencies, the euro changed hands at USD1.0834 from USD1.0874 on Thursday in closing European equities while the pound is worth USD1.2629 from USD1.2667 last night.
Among commodities, Brent crude is worth USD91.04 a barrel from USD89.25 last night while gold trades at USD2,282.93 from USD2,293.72 on Thursday night.
Friday's economic calendar includes in the afternoon from the US, at 1430 CET, the release of the nonfarm payrolls report and the unemployment rate, followed at 1515 CET by FOMC memebro Barkin's speech.
At 1900 CET, the Baker Hughes plants report will be released. In the evening-as usual on Friday-the COT Report will be released at 2130 CET.
Among the companies in the Square of Business, the results of TMP Group are expected.
By Maurizio Carta, Alliance News reporter
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