European markets in the red; Avio leads MIB as banks face sell-off

Major European indices opened in negative territory on Thursday, weighed down by rising bond yields and geopolitical tensions in the Middle East. Sentiment was further dampened by Eurozone inflation data, which rose to 3% in April. The Federal Reserve's minutes revealed an increasing openness to further rate hikes, leading markets to price in a more than 50% probability of monetary tightening by December. On the macro front, preliminary estimates showed the S&P Global Germany Composite PMI rose to 48.6 in May, indicating a second consecutive month of contraction in private sector activity amid weakening demand and elevated inflationary pressures. In Milan, banking stocks are retreating, with the FTSE Mib down 0.3% at 49,048.42 points. The Mid-Cap has shed 0.2% to 60,813.22 points, while the Small-Cap is down 0.2% at 34,408.46 points. London’s FTSE 100 is 0.4% in the red, the Paris CAC 40 is down 0.3%, while the Frankfurt DAX 40 is up 0.5%. Avio soared to the top at the open, advancing 4% with over 300,000 shares already traded, while banking stocks sit at the bottom. Assicurazioni Generali showed strength, rising 2.2% after announcing a normalized net profit of EUR1.27 billion for the first quarter, up 5.2% from the previous year. Ferrari is rallying, marking a 1.8% gain, leading the Euro Stoxx 50 index. Stellantis is also seeing buying interest, up 0.9%, as it accelerates its Italian production relaunch with the E-Car project, which involves starting production of compact and affordable electric cars in Pomigliano from 2028. The banking sector is facing selling pressure, with MPS down 0.5%, BPM shedding 0.6%, and BPER falling 0.7%. UniCredit is down 1.6%, sitting at the bottom of the main list, after announcing the results of its cash tender offer for its subordinated bond. The total nominal amount of notes remaining outstanding will be EUR586.3 million. On the Mid-Cap, Salvatore Ferragamo leads the gainers with a 2.0% rise, marking its fourth consecutive session in the green. The overall market sentiment remains cautious as investors await further economic data and developments in geopolitical tensions.