(Alliance News) - Europe's major stock markets closed lower Wednesday, with the U.S. policy standoff over the debt ceiling creating tensions in the markets as the June 1 debt default deadline draws ever closer.
"The modest declines of the past two days accelerated today, with sharp declines across the board, as sentiment continues to deteriorate, raising the question of whether this is the beginning of a market rejection that will get the attention of U.S. lawmakers and generate the urgency needed to preserve the fiscal integrity of the U.S. government," commented Michael Hewson, Chief Market Analyst at CMC Markets UK.
"We have seen weakness across the board with sharp declines in the DAX 40, FTSE 100 and CAC 40 while European markets suffer their biggest one-day loss since March, with the FTSE 100 falling below its April low and to its lowest levels in six weeks," the analyst added.
London was also weighed down by the latest data on consumer price inflation, which fell to 8.7 percent year-on-year in April, the lowest since March 2022, but remained higher than expected at 8.2 percent.
Thus, the FTSE Mib closed 2.4 percent in the red at 26,524.54.
Among the smaller Milanese listings, the Mid-Cap closed down 2.2 percent to 41,818.37, the Small-Cap gave up 1.7 percent to 27,503.53 while Italy Growth finished 0.4 percent in the red to 9,125.42.
London's FTSE 100 closed 1.8 percent in the red at 7,627.10, Paris' CAC 40 gave up 1.7 percent to 7,250.40 while Frankfurt's DAX 40 dropped 2.0 percent to 15,825.65.
On the main list of Piazza Affari, among the few bullish performers was Mediobanca, which topped with 1.9 percent after its board of directors announced Wednesday that it had approved the guidelines of its 2023-26 plan. As stated in the released note, "the group sets challenging targets and confirms its ability to generate growth in profitable assets: total financial assets at EUR115 billion, up 11 percent and AUM/AUA at EUR85 billion, up 13 percent. In addition, loans to customers are EUR57 billion, up 3 percent.
Prysmian, Tenaris and Moncler follow, advancing 0.4%, 0.2% and 0.03%. Also just above par is Eni, which closes the group of stocks in the green. On Wednesday, the six-legged dog company reported that it bought back 726,423 of its own shares on May 15 at a weighted average price of EUR13.3531 per share. The total countervalue was about EUR9.7 million.
At the bottom ends Banca Monte dei Paschi, in the red by 7.1 percent, while Pirelli, Leonardo, and STMicroelectronics also give way, all down between 5.4 percent and 5.0 percent, while Saipem retreats 4.5 percent and CNH Industrial loses 4.4 percent.
Red prevails on the Mid-Cap as well, with few exceptions. Only Saras, Industrie De Nora and Maire Tecnimont are saved, up 1.5%, 0.4% and 0.2%.
MFE-MediaForEurope announced Wednesday that its board of directors approved first-quarter results in which a consolidated profit of EUR10.1 million was reported from EUR2.7 million in the same period a year earlier. A shares give up 2.1 percent and B shares 3.6 percent.
Credito Emiliano -- in the red by 2.4 percent -- on Monday launched its second EUR400 million green bond issue aimed at institutional and professional investors.
The issue, in Senior Non Preferred format, represents the third ESG instrument launched on the market by the group since early 2022.
Seco gives up 3.1 percent in closing. As a ProiezioniDiBorsa focus on Seco stock on Wednesday points out, "Even when the tech sector was making waves at the beginning of the year, there was a stock that was struggling. Conditions may have been created for a bullish stretch."
Of strengths, Seco's stock does not have a lot of them, the BSI analyst team points out. Among them is certainly the strong growth expected in the coming years. According to the consensus of analysts who follow the company, net income per share is expected to grow significantly in the coming years.
Against the stock, however, "plays the strong overvaluation in terms of market multiples.
Brunello Cucinelli -- in the red by 1.6 percent -- announced Tuesday that it had reached an agreement with Chanel and the Cariaggi family to sell an 18.5 percent stake in Cariaggi Lanificio Spa to Chanel.
On the Small-Cap, Banca Profilo closes 3.2 percent in the red after reporting Tuesday that parent Arepo BP Spa and Twenty First Capital SaS, a French alternative investment fund management company and limited partner and portfolio manager of the French-law fund Fonds Archimedes, have reached a conditional binding agreement to buy and sell a number of Banca Profilo shares held by Arepo equal to 29 percent of its share capital, net of treasury shares.
CIA leads the list and picks up 6.8 percent while Eukedos closes it down 11 percent.
Among SMEs, GO Internet is at the top, closing up 35 percent and bringing the price to EUR0.12 per share.
Iniziative Bresciane - in the green by 0.6 percent - reported Wednesday that the company's board of directors approved the plan to merge Iniziative Mella Srl into the company.
Impianti - up 2.2 percent - announced Wednesday that the process of assigning the second tranche of the 2025 warrantsal whose ex-dividend date was May 22 was completed, with 1.9 million warrants being assigned free of charge to all shareholders, according to the ratio of 1 warrant for every 4 shares held.
Convergenze-which closes at a breakeven at EUR2.14 per share-announced that the acquisition of a customer portfolio of Positivo Srl, a wholly owned subsidiary of Convergenze, has been finalized, and will take effect June 1.
In New York on European overnight, the Dow is giving up 0.8 percent, the Nasdaq is in the red by 0.9 percent, and the S&P 500 is back 0.8 percent.
Among currencies, the euro changes hands at USD1.0757 versus USD1.0778 at Tuesday's European stock close. In contrast, the pound is worth USD1.2366 from USD1.2425 on Tuesday evening.
Among commodities, Brent crude is worth USD78.24 per barrel versus USD77.31 per barrel Tuesday night. Gold, meanwhile, trades at USD1,965.76 an ounce from USD1,966.95 an ounce last night.
On Thursday's macroeconomic calendar, at 0800 CEST, Germany's Gross Domestic Product is expected along with Gfk's report on sentiment among German consumers.
At 1430 CEST, GDP will be released in the US along with the data on initial claims for unemployment benefits.
From Canada, also at 1430 CEST, will come manufacturing sales.
In Piazza Affari, DHH's quarterly results are expected.
By Chiara Bruschi, Alliance News reporter
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