Europeans expected to fall; Brent crude above USD90

(Alliance News) - European stock markets are expected to fall on IG futures Wednesday morning as markets digest services sector data released yesterday that showed a weaker-than-expected picture.

PMI data showed the sector in Italy and Spain slipped into the contraction zone in August and "stoked dovishness in the European Central Bank and pushed the EURUSD lower yesterday. The pair fell to its lowest levels since early June supporting the idea that the ECB may not raise interest rates next week when the economic picture is deteriorating rapidly," commented Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank.

"But I believe it can. The ECB can announce another 25bp hike when it meets next week, or a faster reduction in its balance sheet, or an end to banks' remuneration of minimum reserves to tighten financial conditions, because the latest Eurozone inflation data showed stagnation instead of further easing, and the ECB will allow economic weakness to some extent to fight inflation. The latest data on inflation expectations in the Eurozone showed that expectations for the next 12 months remained firm at 3.4 percent, but three-year inflation expectations have shot up to 3.4 percent, and there is no reason to continue easing inflation expectations when energy prices are skyrocketing."

Indeed, oil, which surpassed USD90 per barrel, was affected by the decision of Saudi Arabia and Russia announced yesterday: the two producing countries confirmed an extension of cuts of 1 million barrels per day until the end of December.

Thus, the FTSE Mib is expected to fall 80 points or 0.3 percent after closing just above par at 28,652.18.

In Europe, Paris's CAC 40 is expected to open down 20.9 points or 0.3 percent, Frankfurt's DAX 40 in the red 25.3 points or 0.2 percent, while London's FTSE 100 is given a drop of 31.6 points or 0.4 percent.

Among Italy's smaller listings on Tuesday evening, the Mid-Cap gave up 0.4 percent to 42,020.18, the Small-Cap closed in the red 0.3 percent to 27,198.25 while the Italy Growth closed in the red at 8,880.97.

On the bluechip list, Saipem advanced 2.6 percent to EUR1.50 per share, after a 2.3 percent decline on the eve in line with rising barrel prices.

Indeed, parent company Eni also moved against this backdrop, taking home a plus 1.6 percent.

CNH Industrial advanced with 1.6 percent bringing the price up to EUR13.08 after the 0.9 percent green light on eve.

Good purchases were also made on Prysmian, which posted a plus 0.5 percent. The company on Tuesday disclosed that it has signed a capacity reservation agreement for a capacity reservation fee of up to about EUR90 million with Marinus Link Pty Ltd, a subsidiary of TasNetworks, Australia's transmission system operator, for a new power interconnection between Tasmania and the state of Victoria.

The agreement provides, among other things, for the Commonwealth government's guarantee of the capacity reservation fee of up to about EUR90 million and the continued availability of capacity by Prysmian until the final contract is signed to be in place by July 2024.

Generali closed down 0.5 percent to EUR18.91. Of note, Morgan Stanley raised its target price to EUR21.00 from EUR19.00. On Trieste's Leonde, the tp was also revised upward by Société générale, which set it at EUR20.00 from EUR18.10 previously.

BPER Banca - down 0.8 percent - on Tuesday reported that it had successfully completed the placement of the EUR500 million Senior Non Preferred bond issue with a maturity of 6 years and the possibility of early repayment after 5 years intended for institutional investors. Confirming the high market interest in BPER Bank, the issue raised orders exceeding EUR1.3 billion from about 130 investors.

Queue on the list also for Nexi, which gave up 1.4 percent, ending for the fourth session in a row on the bearish side.

On the Mid-Cap, Fincantieri advanced well, appreciating 1.6 percent after falling 2.1 percent in the previous session.

Eurogroup Laminations, on the other hand, rose 2.6 percent, on the heels of the eve's gain that closed with a plus 0.3 percent.

Carel Industries also had a good session, advancing 3.3 percent after the 0.2 percent red on eve.

GVS depreciated 4.0%, in its fourth session among the bearish. On Tuesday it reported first-half net income of EUR7.3 million, up from EUR32.4 million as of June 30, 2022. Consolidated revenues for the period amounted to EUR213.4 million, up 28 percent from EUR166.6 million in 2022.

Rear-views also for Safilo, which fell 2.9 percent after a 0.9 percent profit in the eve.

On the Small-Cap, Fidia gave up 2.0% bringing the price to the EUR1.23 area.

Bastogi, on the other hand, gave up 0.3 percent after 0.3 percent assets in the previous session.

Softlab dropped 2.0 percent, placing the price at EUR1.71, after two sessions closed among the bullish.

LVenture, on the other hand, gave up 3.9%, veering downward after two bullish sessions.

Itway lost 2.5 percent after announcing Friday that it had signed a partnership with CLoudian, a leading enterprise-class object storage software company. As explained by Itway, this partnership aims to further expand Itway's cyber security and cyber resilience offerings. Itway Group expects revenues of EUR5 million in the next two years by operating in the service provider, public administration, healthcare, energy, education, banking and insurance sectors.

Piquadro advanced 3.7 percent bringing the price to EUR. The company, which is continuing with its buyback program, most recently disclosed on Monday that it bought back its own shares in the period between Aug. 28 and Sept. 1 for a total value of EUR67,000 or so.

Among SMEs, Ecomembrane closed up 3.3 percent, after 2 percent on the eve.

Estrima, on the other hand, picked up 5.5 percent, after closing unchanged in the previous session.

Alfonsino gave up 1.3 percent, despite announcing on Tuesday that it had reached a cooperation agreement with Gruppo VéGé, the first Modern Distribution group to be born in Italy, consisting of 32 member companies located throughout Italy and active with more than 3,000 stores including hypermarkets, superettes and Cash&Carry.

Askoll Eva gave up 1.1 percent, bringing the price down to EUR0.5320 after a 2.2 percent decline on the eve.

ISCC Fintech, on the other hand, gave up 5.5 percent, with new price at EUR3.12 after two sessions closed among the bearish.

In Asia, the Nikkei is up 0.6 percent, the Shanghai Composite is just above par and the Hang Seng is in the red by 0.2 percent.

Among U.S. exchanges, the Dow Jones closed down 0.6 percent to 34,641.97, the S&P down 0.4 percent to 4,496.83 while the Nasdaq finished down 0.1 percent to 14,020.95.

Among currencies, the euro changed hands at USD1.0731 to USD1.0715 in Tuesday's closing European equities while the pound was worth USD1.2581 to USD1.2565 Tuesday evening.

Among commodities, Brent crude is worth USD90.03 per barrel versus USD90.78 per barrel at Tuesday's close. Gold, on the other hand, trades at USD1,926.89 an ounce from USD1,927.00 an ounce Tuesday evening.

On Wednesday's economic calendar, the construction PMI in Italy, as well as in France and Germany and the Eurozone, will be due at 0930 CEST. At 1100 CEST the Eurozone retail sales data.

At 1300 CEST the 30-year mortgage rate, at 1430 CEST the trade balance, at 1545 CEST manufacturing and services PMI. In the evening, at 2000 CEST there will be a Fed speech by Logan, and at 2230 CEST the weekly oil stocks figure.

Among companies, results from Aeroporto Guglielmo Marconi Di Bologna, Cellularline and Tod's are expected.

By Chiara Bruschi, Alliance News reporter

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