Stock markets down as dollar rises; luxury goods hurt

(Alliance News) - On Wednesday, major European stock markets close in negative territory, in one of the worst sessions since the beginning of the year after hopes of a rate cut in the UK diminished and the US dollar rose.

Thus, the FTSE Mib closes 0.8 percent in the red at 30,098.86, the Mid-Cap gives up 0.5 percent to 44,090.45, the Small-Cap drops 0.9 percent to 27,338.70, and Italy Growth ends 0.3 percent in the red at 8,215.06.

In Europe, London's FTSE 100 ends down 1.5 percent, Paris' CAC 40 ends down 1.1 percent, and Frankfurt's DAX 40 gives up 0.9 percent.

"The 2024 FTSE 100 went from bad to worse after this morning's inflation data. Hopes of an early rate cut by the Bank of England have diminished dramatically, leaving the index flat. While the U.S. and European indexes are still up sharply from their October lows, the FTSE 100 has lost just 2 percent," commented Chris Beauchamp, chief market analyst at IG.

"Today's news about UK inflation hit domestic stocks hard, but international companies, such as the mining sector, have been hit by the strengthening dollar that has driven down commodity prices. This double blow puts the index in trouble, and a return to the October lows is a distinct possibility."

On the Mib, Iveco Group closed 2.0 percent in the red. The company announced Wednesday that it has won its largest electric bus contract in Italy and will supply 411 battery electric vehicles to ATAC Spa, the capital's public transport company for mobility.

The contract is worth more than EUR300 million and is part of ATAC's strategic plan to offer increasingly sustainable, efficient and affordable mobility, the company points out in a note.

The supply includes the new electric buses, 12 or 18 meters in length, and their complete maintenance for ten years. The first deliveries are expected by the end of 2024, and all remaining buses will be delivered by mid-2026.

Telecom Italia -- in the green by 0.9 percent, as part of activities aimed at closing the NetCo sale transaction and following the signing of the transaction agreement with Optics BidCo -- a subsidiary of KKR -- announced on Wednesday that it had received approval to execute the transaction for the purposes of Golden Power regulations.

The consent order, by which the Council of Ministers exercised special powers in the form of prescriptions only, endorsed the commitments submitted during the proceedings. These were commitments deemed by the government to be fully suitable to guarantee its protection of the strategic interests related to the assets involved in the transaction.

Mediobanca rises 2.6 percent, after announcing Tuesday the birth of Mediobanca Premier, the bank specializing in the management of savings and investments of Italian families. "A key initiative in the Mediobanca Group's growth path outlined in the Strategic Plan 2023-26 "One Brand - One Culture," which sees as a priority objective the development of the Wealth Management division," reads the bank's note.

Fashion goes down, with Moncler closing on the bottom giving up 2.8 percent. Also hurting is Brunello Cucinelli, down 1.8 percent.

On the cadet segment, Webuild -- up 5.3 percent -- announced Wednesday that it will carry out interventions for the EUR4.7 billion Trojena ski destination in Saudi Arabia.

This is a "unique infrastructural intervention to create in a desert area a resort of the future with dams, a lake, and iconic architectural works," the company announced.

More than 10,000 people, including direct and third-party personnel, are estimated to be employed to carry out the works, commissioned by client Neom.

Maire Tecnimont closes flat at EUR4.89 per share, after reporting Wednesday that subsidiary Tecnimont was awarded a front-end-engineering design contract for a green ammonia plant in Norway.

The contract was awarded by Fortescue, a global company active in green technologies, energy and metals.

Among smallcaps, Itway -- in the green by 2.7 percent at the close -- continuing its growth and expansion plans, announced Wednesday that it has entered into a strategic partnership with Rafiflow in OT Cyber Resiliency.

Radiflow, founded in 2009 and based in Tel Aviv, offers solutions successfully used by major industrial and utility companies that protect more than 6,000 critical facilities worldwide.

As a result of this partnership, Itway expects additional revenues of EUR5 million over the next three years in reference to a variety of sectors such as manufacturing, chemicals, power and renewable energy, oil and gas, water/sewer, transportation and logistics.

BF closes in the green 0.3% to EUR3.89 per share after announcing Tuesday that subsidiary BF International Best Fields Best Food Limited has entered into a partnership with Musahamat Farms Limited, a Ghanaian-registered company active in the agricultural sector.

FNM gives up 0.7 percent after announcing Monday that it has decided to take over 80 percent of Viridis Energia Spa from Lagi Energia 2006 Srl and HNF Spa, which hold 55.7 percent and 33.3 percent, respectively.

Openjobmetis -- flat at EUR16.00 per share -- on Monday announced that it had finalized the acquisition of 100 percent of Just On Business Spa and 100 percent of its subsidiary Deine Group Srl.

The agreed consideration is EUR29.7 million in cash, plus the signing of a 3-year non-compete agreement with the founding partners valued at EUR2.2 million in total.

Among SMEs, SIF Italia--up 3.5 percent--reported that it has appointed Vincenzo Acunto as the company's new board member and CEO.

Gibus gives up 5.8 percent after reporting Tuesday that it ended 2023 with revenues of EUR91.4 million, up 8.8 percent from EUR83.9 million in the previous year.

The 2023 performance is mainly attributable to the contribution of the Leiner Group, which was acquired on Sept. 30, 2022 and consolidated as of Oct. 1 of the same year: the deal helped consolidate the group's business model and increase penetration in its main European markets, namely Germany and Benelux.

ESI - down 1.7 percent - announced on Monday that it had signed a contract with a leading multinational oil & gas company for the turnkey EPC construction of a new photovoltaic plant with a total capacity of 10 MWp in Piedmont.

The contract amount of approximately EUR5.7 million will be accrued in fiscal year 2024.

In New York, the Dow is in the fractional red at 37,349.60, the Nasdaq gives up 0.9 percent to 14,817.01, and the S&P 500 loses 0.5 percent to 4,741.75.

Among currencies, the euro changes hands at USD1.0848 against USD1.0926 recorded at Tuesday's European stock close while the pound is worth USD1.2662 from USD1.2710 last night.

Brent crude is worth USD77.66 per barrel versus USD77.65 per barrel at Tuesday's close. Gold, meanwhile, trades at USD2,011.50 an ounce from USD2,029.24 an ounce last night.

Thursday's macroeconomic calendar opens at 0050 CET in Japan with the release of data on main machinery orders, while at 0101 CET it moves to the UK where there is the release of the RICS housing price report.

At 0800 CET there is the release of data on car registrations in the Eurozone.

At 1000 CET in Spain the Spanish trade balance is released and at the same time comes current account data.

In the Eurozone, at 1100 CET, the data on production in the construction sector is released.

At 1330 CET, the ECB publishes the minutes of the meeting concerning monetary policy decisions. Overseas, at 1430 CET, data on continuing unemployment claims and new construction sites are expected.

At 1615 CET, a speech by ECB President Christine Lagarde is expected.

Among companies listed on the Milan Stock Exchange, no particular announcements are expected.

By Claudia Cavaliere, Alliance News reporter

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