Milan closes higher as oil drop eases pressure on European markets
The FTSE Mib index in Milan closed at 51,261 points, gaining 0.87% on the session as falling oil prices and declining bond yields gave equity markets room to breathe. The rally was broad-based across Europe, with Frankfurt up 0.77%, Paris gaining 0.42% and London rising 0.4%.
The catalyst came from Saudi Arabia's decision to cut crude prices for Asian buyers in November, which helped push Brent crude down to $99.24 a barrel — its lowest level in months. The move signals a cooling in oil markets as supply from the Middle East expands.
"Oil prices remain contained and rates are stabilising," one market analyst told ANSA. "Anything that helps investors scale back expectations on interest rate hikes favours confidence, provided economic growth continues to be perceived as solid."
Banks rebound but Mps takeover drama keeps investors on edge
Italian banking stocks led the recovery in Milan after a bruising start to October. Monte dei Paschi di Siena rose 2.34%, while Intesa Sanpaolo gained 1.2% and Bper added 1.5%. UniCredit, which had fallen sharply earlier in the week, climbed 1.64%.
The sector remains under close scrutiny as the takeover battle for MPS intensifies. Intesa Sanpaolo has relaunched its public exchange offer for the Siena-based lender, increasing the cash component and securing a commitment from Delfin — a major MPS shareholder — to back the bid.
MPS management is weighing counter-moves that could include postponing the shareholder meeting scheduled for 29 October, proposing a larger extraordinary dividend, or seeking a rival bidder. The outcome hinges on shareholder votes on other proposed operations involving Banco BPM and Banca Generali.
The broader outlook for Italian banks remains constructive. Barclays forecasts average earnings-per-share growth of 5% in 2026 for the sector, while Morningstar DBRS points to "solid results" in the second quarter with high profitability and contained credit costs.
Spread narrows sharply as bond tension eases
Italy's risk premium saw a pronounced contraction. The BTP-Bund spread closed at 105.3 basis points, down from 113 at the previous close and well off the session low of 104. The yield on the Italian 10-year bond settled at 4.52%, with the German Bund at 3.47%.
The narrowing reflects a broader reduction in tension across debt markets. French OATs saw yields drop 11 basis points to 4.74%, aided by disappointing economic data and Marine Le Pen's pledge to bring the French deficit below 3% of GDP by 2032.
The Bank of Italy, in its April 2026 Financial Stability Report, estimates an average 10-year BTP yield of 4% for the year. Individual savers who subscribed to the BTP Italia Sì bond in June locked in a minimum real rate of 1.6% plus national inflation.
Telecoms and energy lag as defensive stocks retreat
Not all sectors shared in the gains. Telecom Italia fell 3.6%, dropping below €6 a share, while defence stocks also struggled — Leonardo lost 2.2% and Fincantieri slid 3.55%.
Energy stocks bore the brunt of the oil price decline. Eni slipped 1.16%, Saipem fell 1.7% and Tenaris dropped 2.8%. Gas prices moved in the opposite direction, rising 3% to above €76 per megawatt-hour.
The standout performer outside the main index was Fidia, which surged 35% in a single session. Recordati rose 1.7% after aligning with a new offer price of €53.
Wall Street opens higher as investors eye Fed minutes
US markets extended the positive tone. The Dow Jones opened up 0.31% at 51,424 points, while the Nasdaq gained 0.72% to 27,675. The S&P 500 touched an intraday record high of 7,824.51 points, supported by technology stocks and the drop in Treasury yields.
Investors are awaiting minutes from the Federal Reserve's latest meeting, which could clarify the scale of future rate moves. Expectations of an October hike have dropped to around 25-39% on major tracking platforms, though a December increase remains likely.
In Tokyo, the Nikkei opened little changed, down 0.09% at 70,622 points, as investors took profits after the index's recent run past 70,000. The yen held steady at 158.40 to the dollar.
