Piazza Affari closes higher as weak US jobs data eases rate fears
European stock markets rallied on Friday after US employment figures came in well below expectations, a signal that investors believe will keep the Federal Reserve from raising interest rates at its next meeting. The main index of the Italian stock exchange, the FTSE Mib, gained 0.49% to close at 50,483 points, recovering some of the ground lost earlier in the week.
The rally was driven by a surprising shift in expectations for US monetary policy. Data released on Friday showed the American economy added just 29,000 new non-farm jobs in September, far fewer than the 90,000 analysts had forecast. The unemployment rate rose to 4.2%.
Semiconductor stocks lead the gains
Italian technology companies were among the best performers of the session. STMicroelectronics, the Geneva-listed semiconductor giant with major operations in Italy, jumped 6.67%. Technoprobe, the Cavenago di Brianza-based maker of probe cards used to test microchips, rose 5.99%.
The gains reflect growing global demand for chips used in artificial intelligence and data centres. Prysmian, the cables group based in Milan that supplies infrastructure for data transmission, also rose sharply, gaining 3.96%.
Other Italian blue chips were more mixed. Concrete maker Buzzi gained 1.58% and national utility Enel added 1.51%. Carmaker Stellantis rose 0.88%.
Banking shares under pressure
Italian banks were a weak spot in the market despite the broader rally. Bper lost 1.58%, while UniCredit fell 1.33% and Intesa Sanpaolo dropped 1%. The declines reflected broader investor caution about financial stocks across Europe as markets digest the outlook for interest rates.
France's Credit Agricole fell 0.95% and Germany's Commerzbank lost 0.7%. The pressure on banking shares contrasted with the upbeat tone in technology and industrial sectors.
Government bond tensions ease
The spread between Italian 10-year government bonds and their German equivalents narrowed in the session, a sign of reduced stress on sovereign debt markets. The differential between Btp and Bund yields fell to 114.8 basis points at the close, down from above 126 points earlier in the day.
The yield on the Italian 10-year bond dropped 9 basis points to 4.6%. German yields fell 5.8 basis points to 3.45%. The French spread over German Bunds stood at 140.5 points, with French yields at 4.84%, down 6.8 points.
For Italian savers and investors, the narrowing spread reduces the pressure on borrowing costs that feed into mortgage rates and corporate financing. A narrower spread signals that international investors view Italian debt as less risky relative to Germany.
Oil falls below $100, gas rises
Brent crude, the international benchmark for oil prices, slipped 1.4% to $100.90 a barrel, falling below the symbolic $100 threshold. West Texas Intermediate traded below $90 earlier in the session. The declines came amid reports that European countries were discussing releases from strategic reserves to cap fuel prices.
Natural gas moved in the opposite direction. European gas contracts for November delivery rose 1.5% to €75.04 per megawatt hour at the Dutch TTF hub, the continent's main pricing point.
Gold nudged 0.16% higher to $4,182.64 an ounce.
Currency markets
The euro strengthened against the dollar. The single currency traded at around $1.13, up from recent lows, as the weaker US jobs data weighed on the greenback. The pound fetched $1.32.
European markets rally
Frankfurt's Dax index led European gains, surging 1.24% to 25,231 points, boosted by its heavyweight technology and industrial stocks. Paris's Cac 40 added 0.79% to 7,897 points. London's FTSE 100 rose 0.32% to 10,461 points, while Madrid's Ibex 35 gained 0.4% to 19,081 points.
The pan-European Stoxx 600 index rose more than 0.5%, with technology stocks the best-performing sector.
Based on reporting from ANSA, Italy's principal news agency.
