Indices down; wait for ECB and US GDP

(Alliance News) - European stock markets are heading for a downward opening Thursday according to IG futures, following losses in global markets as disappointing earnings reports and soaring Treasury yields dampened investor sentiment.

Weighing down in the U.S. was the latest third-quarter data from Alphabet, owner of Google, "which posted its largest one-day loss since March 2020, due to a slight loss in cloud revenues. This in turn saw the Nasdaq 100 fall to 4-month lows, with selling prevailing in the rest of the tech sector," commented Michael Hewson, Chief Market Analyst at CMC Markets.

"Last night's decline in U.S. markets and a similar decline in Asia look set to translate into a bearish European open ahead of another big macroeconomic day with the ECB and U.S. third-quarter GDP taking center stage," added the analyst.

Investors, therefore, are also maintaining a cautious stance ahead of this afternoon's policy decision by the European Central Bank, which may to keep interest rates unchanged after 15 consecutive months of increases.

The FTSE Mib is expected to fall 155 points or 0.6 percent after closing Wednesday down 0.5 percent at 27,445.35,

London's FTSE 100 is expected to open down 31.2 points or 0.4 percent, Paris' CAC 40 is down 44.0 points or 0.6 percent, and Frankfurt's DAX 40 is given in the red 122 points or 0.8 percent.

Among Italy's smaller lists on Wednesday evening, the Mid-Cap fell 1.1 percent to 37,785.66, the Small-Cap fell 1.8 percent to 23,981.02 and Italy Growth lost 0.8 percent to 7,685.67.

On the main list in Piazza Affari, Banca Monte dei Paschi lost 2.3 percent, following up on the eve's loss that closed down 0.3 percent.

Negative note also on Telecom Italia, in the red by 4.1% with price at EUR0.2390, following up on the previous four bearish sessions.

UniCredit gave up 2.2%, with price at EUR22.4950 per share, after two bullish sessions. Of note, Barclays, UBS and JP Morgan raised their target prices on the stock.

On Tuesday morning, the board of directors approved "record results" for the first nine months of the year, during which the group made a profit of EUR6.70 billion, up nearly 68 percent from EUR4.00 billion in the same period of 2022.

In the third quarter, the group realized revenues of EUR6.00 billion, up 24 percent from EUR4.82 billion in the third quarter of 2022. Net interest income amounted to EUR3.60 billion, up 45 percent from EUR2.48 billion in the same period of 2022, mainly due to higher interest rates and good management of deposit pass-through.

Enel -- down 0.4 percent -- and its listed subsidiary Enel Chile announced Wednesday that they had finalized the sale to Sonnedix of their entire shareholdings in the share capital of Arcadia Generación Solar, a Chilean company that owns a portfolio of four operating photovoltaic plants totaling about 416 MW of installed capacity. The buyer paid a total consideration of USD556 million, or approximately EUR525 million, corresponding to 100 percent of the enterprise value agreed by the parties.

The board of directors of Italgas -- up 0.3 percent -- approved consolidated results for the first nine months, which closed with adjusted net income attributable to the group of EUR316.7 million, up nearly 11 percent from September 30, 2022 when it was EUR285.9 million. Total revenues were EUR1.37 billion, up 26 percent over the same period last year from EUR1.09 billion.

Also advancing was Banco BPM, up 1.0 percent after the eve's 1.9 percent red.

On the cadet segment, Antares Vision lost 10% to EUR2.52, a new 52-week low.

Eurogroup Laminations retreated 6.2%, also updating its one-year low to EUR3.20 per share.

Webuild, on the other hand, lost 2.4 percent after two sessions closed with a bullish candle.

Also on a positive note was Salcef, which rose 2.8 percent and with the company continuing its buyback program on a regular basis. Most recently, it reported on Monday that it bought back 27,703 of its own ordinary shares between Oct. 16 and Oct. 20, for a total value of about EUR620,000.

Salvatore Ferragamo was up 0.2 percent. Of note, on the stock Kepler Chevreux cut its target price to EUR10.00 from EUR13.00, while Goldman Sachs raised it to EUR13.60 from EUR14.00 per share.

On the Small-Cap, Aeffe gave up 3.9 percent to EUR0.7340, with the stock marking a new 52-week low at EUR0.71.

Geox lost 8.0%, updating a new annual low of EUR0.6470 per share.

Esprinet - down 4.1 percent - announced Tuesday that the deed of merger by incorporation into of its wholly owned subsidiary 4Side has been finalized.

Mondo TV--down 4.8 percent--reported Tuesday that it has signed an agreement with Mi Media International, a major Asian distributor, for the placement of the animated series Meteo Heroes in Brunei. The final agreement covers freetv, internet, mobile rights for the next three years against payment of a "flat fee."

Among SMBs, Comal rose 1.9 percent after a 0.6 percent red note on the eve of the deal while Cofle--up 1.2 percent--reported Wednesday that the board of directors reviewed consolidated revenues for the first nine months of the year, which came in at EUR46.8 million, up nearly 18 percent from the same period last year, when it was EUR39.7 million.

The board of directors also resolved to propose to the shareholders' meeting the adoption of a plan to purchase and dispose of treasury shares up to a maximum number not exceeding 20 percent of the company's capital. The amount that can be used for the purchase of treasury shares was set at EUR1 million.

Among the bearish, Clabo plummeted 42 percent, albeit with low volumes of 14,000 changed hands.

In Asia, the Nikkei closed down 2.2 percent at 30,575.00, the Hang Seng is down 0.3 percent at 17,048.00

and the Shanghai Composite is up 0.3 percent to 2,982.67.

In New York, the Dow closed down 0.3 percent to 33,035.93, the Nasdaq gave up 2.4 percent to 12,821.23 and the S&P 500 lost 1.4 percent to 4,186.77.

Among currencies, the euro changed hands at USD1.0541 against USD1.05730 recorded at Wednesday's European stock close while the pound is worth USD1.2075 from USD1.2128 last night.

Among commodities, Brent crude is worth USD89.23 per barrel from USD87.46 per barrel at yesterday's close. Gold, on the other hand, trades at USD1,986.07 an ounce from USD1,977.38 an ounce last night.

Thursday's macroeconomic calendar includes Spanish unemployment data at 0900 CEST and a six-month BOT auction in Italy at 1110 CEST.

The highlight of the day is expected at 1415 CEST, with the ECB's rate decision, followed - half an hour later - by a lecture by the president, Christine Lagarde.

In the US, eyes on jobless claims and Gross Domestic Product, coming at 1430 CEST, while data on natural gas stocks will be released at 1630 CEST, an hour before two auctions of four- and eight-week T-Notes while seven-year Treasury bonds will be sold at 1900 CEST. The day will close with the Federal Reserve's balance sheet, due at 2230 CEST.

Among companies in Piazza Affari, accounts from Campari, Eni, Maire Tecnimont, Mediobanca and Moncler, among others, are expected.

By Chiara Bruschi, Alliance News reporter

Comments and questions to [e-mail]

Copyright 2023 Alliance News IS Italian Service Ltd. All rights reserved.