Late yesterday, U.S. President Donald Trump accepted a cessation of hostilities with Iran, less than two hours before the expiration of his ultimatum for Tehran to reopen the Strait of Hormuz, having previously threatened devastating strikes against the country's civilian infrastructure.
Expectations of a resumption in crude supplies are sending commodity prices tumbling, with futures sliding approximately 15% to below 95 dollars per barrel.
Wall Street is also expected to open sharply higher this afternoon.
One trader noted that the jump is driven by relief over what could have happened had further devastating attacks occurred in Iran, but cautioned that it remains a temporary truce and its durability remains to be seen. From a technical standpoint, many stocks were heavily oversold, triggering a wave of short-covering.
Around 12:50 p.m., the FTSE Mib index was up approximately 4%, trading just below the session highs reached at the open. With this rally, the index has effectively recovered all losses recorded since the start of the conflict on February 28, which had been mitigated only by the performance of energy stocks that carry significant weight in the index.
"The agreement is excellent news for the markets following the exceptional uncertainty regarding the conflict's evolution in recent days, amid threats of an unprecedented escalation," Intermonte highlighted.
Trading volumes on the exchange amounted to approximately 3 billion euros.
Today's stock highlights:
** The sharp decline in Brent crude is inevitably weighing on sector stocks, with ENI emerging as the worst performer on the list, down about 8%. Despite today's steep drop, the stock maintains a gain of over 9.5% over the past month and 42% year-to-date.
** Oil service companies are also down sharply, with TENARIS shedding 2.6%, while SAIPEM has turned positive, gaining 0.7%. Gas producer GAS PLUS is down 3.4%.
** In its daily note, Equita wrote that the ceasefire announcement is "negative news for the sector, as it removes part of the 'war premium' and signals an initial easing of tensions, exerting pressure on oil prices and, potentially, on refining margins." The broker added that "the truce remains temporary and fragile: damage to infrastructure and still-disorganized logistics indicate that the physical market remains under strain."
** Banking stocks are up sharply, with the sector index rising 7%, driven in particular by UNICREDIT, which is advancing 8.5% and carries significant weight on the main blue-chip index. Other banking stocks are also rallying with gains between 5% and 6%.
** The rally in STM continues, up 5.8%, hitting new highs since late July 2024 at 32.595 euros.
** Sectors most affected by recent selling pressure on recession fears, such as industrials and luxury goods, are seeing a clear recovery. STELLANTIS jumped 8.3%, while FERRARI rose 7.8%. In the luxury segment, BRUNELLO CUCINELLI and MONCLER both posted gains exceeding 7%, while FERRAGAMO rose around 4%.
** Cement producers are also performing well on expectations of post-war reconstruction, with BUZZI and WEBUILD advancing around 8% and CEMENTIR up 7%. In the engineering and plant sector, DANIELI rose 7.7%.
** MAIRE is also seeing strong demand, advancing 8.4%, having been one of the stocks most penalized by the effects of the war in Iran.
** The rise in LEONARDO (+0.4%) is significantly more contained following yesterday's sharp declines, as the market remains cautious regarding the possible replacement of current CEO Roberto Cingolani in the upcoming round of appointments at state-owned enterprises. FINCANTIERI is up 2.8%.
** BFF BANK continues its rally today, up 5.7% following yesterday's surge. The stock had collapsed last week following news of a Bank of Italy measure to appoint two temporary commissioners to assist the Board in addressing certain financial and control aspects within the institution.
** I GRANDI VIAGGI is also in demand, jumping 10.3%, benefiting from the easing of Middle East tensions and its positive impact on the tourism sector.
(Giancarlo Navach, editing by Andrea Mandalà)
