European stocks open higher as oil slides and investors eye Washington talks
European equity markets began Thursday's session in positive territory, with Frankfurt's DAX leading gains at +0.57%, followed by Paris at +0.43% and London at +0.41%. The upward momentum came as oil prices retreated and investors awaited the outcome of the high-level meeting in Washington between US President Donald Trump and Chinese President Xi Jinping.
Piazza Affari starts strong on energy relief
Milan's Piazza Affari opened with a gain of 0.49%, reaching 52,349 points, with buying interest concentrated in banking stocks. The FTSE Mib index benefitted from a further decline in crude oil prices, which eased pressure on energy-intensive sectors and improved the broader risk sentiment across European markets. Banco BPM led the early gains with a rise of 1.99%.
By mid-session, the Italian benchmark had pared some of its advance to +0.36%, tracking a cautious rally across the continent. The West Texas Intermediate benchmark fell below $90 per barrel, while Brent crude traded around $99. Investors were positioning themselves ahead of the Trump-Xi summit, hoping for signs of a thaw in the tense relationship between Washington and Beijing.
Banks and luxury stocks in focus
Milan's banking sector attracted buyers throughout the day. Banco BPM gained 1.9% and Unicredit rose 0.9%. Luxury names also found support, with Moncler and Amplifon both up 1%. On the downside, Telecom Italia spin-off Inwit and steel pipe maker Tenaris each lost 1.1%, while Fineco and Saipem both fell more than 0.8%.
Oil reversal pulls markets lower
The positive tone proved fragile. By afternoon trading, European bourses had turned negative as oil prices reversed course. Brent crude climbed back toward $100 per barrel, and WTI moved toward $91, pressuring equity futures on Wall Street and dragging European indices lower.
Frankfurt's DAX dropped 0.75%, Paris fell 0.32%, and London limited losses to 0.17%. In Milan, the FTSE Mib slipped 0.44% as the energy reversal weighed on sentiment. Insurance group Unipol fell 2.45%, becoming the session's main drag on the Italian index. Energy major Eni bucked the trend, rising 0.86%, finishing behind only Ferrari, up 1.19%, and Moncler.
PMI data fails to sustain momentum
Positive manufacturing and services data from purchasing managers' indices failed to sustain the early rally. European markets slowed as investors digested mixed signals: the oil decline had stalled, Brent turned slightly higher, and the outlook for the conflict in Iran and the Strait of Hormuz remained unclear. Gas prices hovered around parity, and the euro weakened against the dollar to 1.14. Italian government bond yields rose slightly, pushing the spread between BTPs and German Bunds wider.
By the close, Frankfurt had shed 0.33%, London was barely positive at +0.11%, and Paris stood at +0.05%. Milan finished with a modest gain of 0.17%. Only Amplifon, Banco BPM, and Avio managed gains exceeding 1% on the Italian index. Tyremaker Pirelli rose just 0.33%, showing little reaction to news of a $1 billion investment plan in the United States and the strengthening of CEO Marco Tronchetti Provera's stake in the company.
Milan closes in the red
The final bell saw Milan's FTSE Mib close down 0.18% at 52,003 points, having trimmed steeper losses late in the session. The sell-off in Unipol, down 2.8%, and Generali, down 2.3%, offset gains in Eni, up 2.8%, and luxury retailer Brunello Cucinelli, up 1.75%.
Elsewhere in Europe, Paris closed down 0.39% and Frankfurt lost 0.66%, while London ended essentially flat at -0.03%.
Asia and Wall Street provide mixed lead
Tokyo's Nikkei 225 provided a positive lead for the week, rising 0.69% to 65,465.06 points, recovering from a holiday period despite corrections in US equity markets. US Treasury yields on 10-year bonds had reached their highest levels since 2007. The yen weakened against both the dollar and the euro.
Wall Street opened mixed: the Dow Jones fell 0.34% to 51,688.54 points, while the Nasdaq rose 0.45% to 27,244.28. The S&P 500 slipped 0.10% to 7,756.54 points.
Key drivers for Italy investors
The session highlighted several factors directly relevant to Italian investors:
• Energy costs: The swing in oil prices from below $90 to near $100 for Brent demonstrated how sensitive European equities remain to energy inflation
• Banking sector resilience: Italian banks continued to attract interest despite broader market volatility
• Geopolitical risk: The Trump-Xi talks in Washington represented a attempt to extend an 11-month trade truce until January 2027, with implications for European exports caught between US and Chinese interests
• Currency moves: The euro's weakness to $1.14 affects import costs and export competitiveness for Italian companies
• Bond spreads: The tick up in BTP-Bund spreads signals ongoing vigilance on Italian sovereign debt costs
Dutch investment company Exor, listed in Amsterdam, rose 1.9% after announcing a new €500 million buyback programme, part of efforts to narrow the discount between its share price and net asset value.
