Europeans bullish; BoJ remains dovish

(Alliance News) - European stock markets were heading for a bullish opening Tuesday, with investors awaiting preliminary Eurozone inflation data for October and gross domestic product for the third quarter, as well as from Italy.

Investors are also positioning themselves cautiously ahead of monetary policy decisions by the U.S. Federal Reserve and the Bank of England this week, which are expected to confirm current interest rates.

The BoJ has taken one of the final steps to end its seven-year policy of restraining long-term interest rates, setting the stage for bigger changes while sharply raising its inflation outlook.

The board made a near-unanimous decision Tuesday to allow 10-year Japanese government bond yields to rise above 1 percent, revising its so-called yield curve control policy for the second time in three months. The bank said the 1 percent ceiling on 10-year yields will be considered "a benchmark," stressing that a strict limit on long-term interest rates could lead to "large side effects." The BoJ had previously said it would offer to buy 10-year bonds at 1 percent in fixed-rate operations after raising the cap from 0.5 percent in July.

Among Asian exchanges, the Nikkei rallied 0.5 percent, the Shanghai Composite gave up 1.0 percent, and the Hang Seng is floating down 1.6 percent.

The FTSE Mib, therefore, marks a rise of 102.50 points, after closing up 0.2 percent at 27,339.91 last night.

London's FTSE 100 advances 13.70 points, Paris' CAC 40 advances 24.00 points, and Frankfurt's DAX 40 advances 58.20 points.

Among the smaller lists last night, the Mid-Cap rose 0.7 percent to 37,862.06, the Small-Cap gained 0.3 percent to 24,062.96, and Italy Growth closed in fractional green at 7,595.51.

On the main list of Piazza Affari last night, good session for Mediobanca, which closed up 3.5 percent with price at EUR11.05 per share after two sessions of losses.

Also advancing well was Saipem, which led the price up 3.2% to EUR1.43. Of note, Société générale raised its target price to EUR2.36 from EUR2.30 with a 'buy' recommendation.

UniCredit -- in the money with 1.8 percent -- announced on Monday the start of the first tranche of 2023 share buyback approved by the shareholders' meeting last October 27, for a maximum amount of EUR2.5 billion and for a number of shares not exceeding 160 million. The first tranche is expected to be completed indicatively by March 2024.

Telecom Italia, on the other hand, closed up 0.2 percent at EUR0.2417. As Francesco Bonazzi writes in Alliance News, "Piazza Affari does not believe in the possibility of a Telecom network derby, both because of the government's clear position in favor of the KKR option and the fact that Palazzo Chigi always has Golden Power at its disposal. However, aside from the cold reception received by the Merlyn Partners fund's plan, there remains the knot of Vivendi, which would benefit from the scenario outlined by the Luxembourg fund.

"Telecom Italia is facing perhaps decisive days ahead, with two board meetings scheduled for next Friday and Sunday. While the deadline for the offer of the U.S. fund KKR, which has the support of the government and the involvement of Cassa Depositi e Prestiti, is set for November 8," Bonazzi points out.

Amplifon's board of directors -- down 1.5 percent -- on Monday approved financial data as of Sept. 30, a period that ended with net income on a recurring basis of EUR112.8 million, down 5.7 percent from EUR119.6 million recorded in the first nine months of 2022, " due to lower operating leverage, higher depreciation and amortization and increased financial expenses," the company's note says.

In the cadet segment, Fincantieri advanced well, closing up 5.8 percent, coloring the daily candle green for the third consecutive session.

Technogym -- up 1.1 percent -- reported Monday that total revenues for the first nine months amounted to EUR565.2 million, up 13 percent from EUR498.7 million in the same period a year earlier. The growth, the company explained, was due to double-digit increases recorded in almost all geographic areas, with above-average performance for Europe, MEIA and LATAM.

The board of directors of Piaggio -- in the green by 1.1 percent -- on Monday approved the interim report as of September 30, showing a net profit of EUR85.7 million, the highest value recorded in the reporting period, up 21 percent from EUR70.9 million as of September 30, 2022. The group's consolidated net revenues were EUR1.62 billion in line with revenues as of September 30 last year.

Anima Holding - up 0.3 percent - reported Monday that it bought back 715,246 of its own ordinary shares from Oct. 23 to Oct. 27. The weighted average price was EUR3.85 per share, for a total amount of about EUR2.8 million.

On the SmallCap, TXT e-solutions--up 1.4 percent--reported on Friday that it purchased 17,749 of its own ordinary shares in the days between October 16 and 20. The price charged was about EUR15.70 per share, totaling nearly EUR270,000.

The buy side also prevailed well on Seri Industrial, which closed in the green by 2.7 percent, rebounding after eight sessions closed with a negative balance.

On a negative note, among the many, Mondo TV left 9.4 percent on the parterre, for the fourth in a row with a bearish candle.

Red also for Gabetti, which closed 0.2 percent negative, following up the previous three bearish sessions.

Among SMEs, Digital Magics closed bullish by 5.1 percent, in its seventh session on the bullish side.

Ambromobilare, on the other hand, rallied 4.7 percent, following the previous session's 3.7 percent red.

At the tail end Convergenze left over 10 percent on the parterre at EUR1.52 per share. High trading volume of over 32,000 was recorded on the stock, compared to a 52-week daily average of just under 4,900.

G Rent, on the other hand, gave up 6.2 percent, priced at EUR0.83 and bringing its liabilities since the beginning of 2023 to more than 57 percent.

In New York overnight euroea, the Dow advanced 1.6 percent, while the S&P closed up 1.2 percent as did the Nasdaq.

Among currencies, the euro changed hands at USD1.0604 versus USD1.0608 recorded at Monday's European stock close, while the pound was worth USD1.2146 from USD1.2146 on Monday.

Among commodities, Brent crude is worth USD86.75 per barrel from USD88.30 per barrel at Monday's close. Gold, meanwhile, trades at USD1,995.00 an ounce from USD2,000.50 an ounce on Monday evening.

Tuesday's economic calendar has Italy's Gross Domestic Product at 1000 CET, followed at 1100 CET by Italy's and the Eurozone's inflation rates.

At 1110 CET, an auction of BTPs with 5- and 10-year maturities is scheduled while, at 1200 CET, eyes on Italy's producer price index.

From the US, at 1400 CET, focus on the house price index and at 2130 CET on weekly oil stocks.

On the corporate calendar, coming up are the results of BasicNet, Carel Industries, NVP, Relatech and Stellantis.

By Maurizio Carta, Alliance News reporter

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