European stock exchanges closed lower. Investors preferred to take profits after the good performance of the last few weeks, driven also by the news from China, where there are riots and demonstrations against the government of Xi Jiping and the ‘zero Covid’ policy. In Europe, the ECB’s number one, Christine Lagarde, warned that inflation, while high, may not yet have peaked. The president of the central bank also reiterated that the ECB will proceed with its policy of raising rates precisely to combat the high cost of living. The FTSE MIB fell 1.12%, while the spread rose above 192 points and the yield on ten-year BTPs rose to 3.91%.

Chinese situation and central bank rebus weigh down the stock markets

European stock exchanges started out lower and remained negative throughout the day. Wall Street, fresh from the Thanksgiving holiday, also sailed into negative territory, with investors wondering about the global economy in 2023. The lockdowns and ensuing protests in China do not bode well, and could weigh further on economic trends. The giant Apple, to give just one example, could suffer a reduction in production of 6 million iPhone Pros this year as a result of the protests. Investors, however, are cautious even after the run recorded by the indices in recent weeks: the Ftse Mib, for example, from 12 October to last Friday recorded a progress of almost 21%. Moreover, the rebus on central banks’ moves remains. If the Federal Reserve might slow down the rate hike, as the minutes published last week suggested, it is not known what the ECB will do. Number one, Lagarde, has assured that the central bank will further raise rates to the levels necessary to ensure that inflation returns to its medium-term target of 2% in a timely manner. Lagarde also stated that for now inflation has not peaked. “I would like the October figure (+10.6%) to be the peak, but I’m sorry I wouldn’t go that route, there is too much uncertainty about the transmission of energy costs to the ‘retail’ level to assume that inflation has already peaked.” A few days ago, on the other hand, the ECB’s number two, Luis de Guindos, had said that he believed the inflation rate was at its peak.

Piazza Affari Tim under the lens, sales on utilities
Telecom Italia -1.19% (-1.2%) was once again in the spotlight at Piazza Affari, with shares under pressure since pre-opening. The market continues to wonder about the future of the tlc company, after the press reported over the weekend that the government is putting the brakes on the project to purchase Netco, the company that controls the network and Sparkle, from the consortium led by Cassa Depositi e Prestiti. Thus no offer should be submitted these days, as stipulated in the Memorandum of Understanding signed some time ago, which had set 30 November as the deadline for negotiations. Stocks, however, eventually stemmed their losses, as the possibility of a takeover bid on the entire company by Cdp or a consortium of which Vivendi itself, already a shareholder with a stake of around 24%, could be part, is back in vogue. After all, Fratelli d’Italia, and in particular the current undersecretary to the presidency of the Council, Alessio Butti, have supported the so-called ‘Minerva project’, an operation that envisages the purchase of the entire Tim and its subsequent break-up.

Utility stocks fared badly on press rumours that the extra-profits tax for 2023 would rise to 50% and would be applied on the share of IRES income that exceeds the average 2018-21 result by 10%. In line with the EU Regulation, this solidarity contribution will be temporary, could not exceed 25% of the 2021 Net Assets and would be applied to electricity and gas companies, electricity and gas retailers as well as oil companies. According to rumours, the government’s goal would be to raise EUR 2.6 billion. Analysts at Equita pointed out that ‘it is not clear whether the tax will also be recalculated for 2022’. In any case, although the tax is an extraordinary one, ‘this is negative news for utilities, which are expected to record important improvements in 2023 results’. A2a -2.45% lost 2.45%, Enel -1.64% 1.6%, Hera -0.79% 0.79%, Iren -2.60% 2.6% and Erg +0.54% 0.14%. The latter has reduced the damage as from tomorrow it will enter the Ftse Mib in place of Atlantia +0.04% (inv), which will instead be delisted. In fact, the Benetton family and Blackstone have exceeded 95% of the capital.

Leonardo and Iveco do well, among the small ones Il Fatto flies

On the other hand, Leonardo +0.83% (+0.8%) and Iveco Group +1.46% (+1.47%) went against the trend after the jumbo order won in Brazil. According to rumours, the supply contract, which is expected to be signed in the coming days, should initially concern 96 armoured vehicles worth around EUR 900 million, but would be extendable for a further 120 vehicles up to a potential EUR 2 billion. The important order, among other things, could postpone or even cancel the sale of Oto Melara (the company that makes the armoured vehicles) by Leonardo, as had been hypothesised in recent months. LeStmicroelectronics -2.16% (-2.17%) lost share on fears that Apple might produce 6 million fewer iPhones. Fears of a slowdown in the Chinese economy also caused the value of crude oil to lose share, and thus the prices of oil companies, as well as luxury groups. In particularEni -1.95% dropped 1.92%, Saipem -3.31% 3.3% andTenaris -2.72% 2.7%. Moncler -1.04% also lost 1%.
Outside the main basket Societa’ Editoriale Il Fatto +10.7% was rewarded with a rise of 10% on the day of the presentation of the business plan to 2025, which includes the transformation into a community company.

Eventful day for oil and foreign exchange
It was a bumpy day for oil, which after losing more than 3%, reduced the damage: the wti stood at USD 75.79 per barrel (-0.64%). Finally, the value of gas was stable: the December contract stood at 124.455 euros per megawatt hour. .

On the foreign exchange front, it was also an eventful day for the euro, which first strengthened against the dollar, rising above the 1.04 threshold and touching a top at 1.0497 dollars, a level it had not seen since 30 June 2022. It then did a U-turn at the end, returning to $1.0380 ($1.0392 on Friday evening). The currency is also worth 144.15 yen (144.68), while the dollar-yen stands at 138.86 (140.69). Finally, the value of gas is stable: the December contract stands at EUR 124.455 per megawatt hour.