Markets breathe again but Italy under pressure | Calamatta Cuschieri

Markets breathe again closing with gains recovering, some of the losses from earlier sessions

On Wednesday, European markets closed with gains after US stocks recovered from previous day sharp losses during early trading. Apple Inc. led the FAANG pack during the selloff, trading over 5.1% in the red at session's low. Meanwhile, the European Union rejected Italy's budget proposal and the European Commission announced that an excessive debt procedure should be adopted against Rome, since its budget poses a serious non-compliance risk.

The FTSE 100 closed 1.56% in the green. The best performer was Johnson Matthey Plc. surging 14.15%. The DAX ended 1.71% higher led by Covestro AG gains of 5.47%. The CAC 40 advanced 1.08% at market close with STMicroelectronics closing up 4.84%.

Oil Recover

Oil prices continued to recover on Wednesday from the sharp losses suffered during the previous session. West Texas Intermediate (WTI) surged 4% despite the latest report by the US Energy Information Administration (EIA), which showed another increase in the country's oil inventories.

Crude futures plunged 7% on Tuesday fuelled by the global stock selloff, as well as by concerns that OPEC and other major producers could cut their production. Meanwhile, US President Donald Trump thanked Saudi Arabia for the decline in crude prices, but added he wants to see them go even lower.

Excessive Deficit procedure against Italy

The European Commission (EC) announced on Wednesday that an excessive debt procedure should be adopted against Italy, according to a report by ANSA. The commission added it views Rome's budget as serious non-compliance risk. "We conclude that the opening of a procedure for excessive deficit based on the debt is therefore justified," the EC report reads.

Meanwhile, Italian Prime Minister Giuseppe Conte stated he is convinced that the budget draft is valid. Deputy Prime Minister Matteo Salvini said that the government in Rome would continue to negotiate politely with Brussels but will not change course. He added that Italy would explain to the European Union its structural reforms and investment plans.

Earlier today, Italian banks lead the gains during trading in the European session, after it was reported that Salvini was ready to consider budget revisions. However, the deputy prime minister's party officials later denied the claims, according to multiple media.

 

Disclaimer: 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 are 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 Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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