Markets Roundup… | Calamatta Cuschieri

Italy’s Financial System

Markets in Europe mostly ended Monday in the green. The only exception was Italy being the highlight of the day, with shares in Italian banks losing ground following Prime Minister’s Matteo Renzi’s heavy defeat in the referendum for constitutional changes. Markets were particularly concerned about the Italian Banking industry, which is seen vulnerable to the loss of confidence. Italian Banks are burdened with bad debts and therefore are also in need of refinancing. The referendum outcome resulted in Italian banking shares being dragged down by fears that an aid for the stressful Banca Dei Monte Dei Paschi di Siena (- 4.21%) might fail. Moreover, shares in Unicredit (-3.36%) have for some moments been suspended when a circuit breaker kicked in due to a decrease in shares price of 3.45%. The FTSE MIB declined 0.22%. Banca Popolare di Milano and Banco Popolare plummeted 7.88% and 7.44%, respectively. Mediobanca plunged 4.24%.

The Green Area

On a positive note, the rest of Europe ended in the positive territory. In London, the FTSE 100 increased 0.43%. The mining sector led the gains. Antofagasta surged 4.90% and Glencore rallied 4.45%. The DAX jumped 1.63%. Significant gains were recorded in the automotive industry with BMW climbing 3.23%, Daimler rising 2.56% and Volkswagen growing 2.40%. The CAC 40 rose 1.00%. The best performer was ArcelorMittal, soaring 5.08%.

U.S. Markets opened higher shrugging off earlier losses on Italy’s news and still digesting last week’s non-farm payroll data, which revealed the rate of unemployment dropped to 4.6% in November – the lowest reading since August 2007. Markets also paid attention to the New York Federal Reserve President William Dudley statement, in which he stated that he is in favour of a gradual interest rate increase if the US economy stays on track. Currently, market expectations for a rate hike this month is over 90%. The Dow Jones Industrial gained ground to hit a new record high, with Goldman Sachs contributing the most gains. The S&P 500 also advanced, led by rising energy prices. NASDAQ was also up by over 1%.

The Oil Arena

Today Oil Advanced to 16-Month high as OPEC sent its invitations  to non-members in an effort to secure additional output cuts following last week’s surprise deal after months of uncertainty. The OPEC group invited 14 non-members, which together they make up about a fifth of the world’s oil output. Oil has climbed over 15% from last week’s agreement. These invites might as well wrangle up a few more barrels of cuts although Mexico and Kazakhstan have previously signalled an unwillingness to cut output.

Meanwhile, Mexico’s largest oil company, Pemex, has approved BHP Billiton’s offer today to collaborate with the company in deep water oil explorations in the Gulf of Mexico, Pemex announced this on its Twitter account. So far, Pemex was the only company to explore the area’s deep waters in the Trion oil field, where light crude can be found. BHP Billiton had outbid BP to obtain the rights for the joint venture with Pemex.

This article was issued by Rodrick Duca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investments Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.