Concerns over a possible extension of the conflict in the Middle East are impacting certain commodities. Gold, a classic safe haven asset, is currently at historic highs, trading at $2,255 per ounce (spot price), marking a 21% increase over the last six months. This significant rise is notable especially considering the persistently high interest rates, despite analysts considering the likelihood of a rate cut in June by both the Fed and the ECB. Oil prices are also on the rise, with Brent surpassing $88 per barrel today, reaching levels not seen since October. The price has increased by 1.5% this week and by 14% since the beginning of the year, fueled by geopolitical tensions and extended production cuts by major oil-producing countries such as Saudi Arabia and Russia.
European markets have just reopened after the Easter break, with the Milan index opening relatively flat at +0.07%. This comes after the index reached its highest levels since 2008. Other European markets also saw modest gains, with Frankfurt up by 0.05%, London up by 0.60%, driven by energy and commodity-related stocks. In Asia, the Hong Kong index stood out with a 2.21% increase, led by Xiaomi, a brand known for smartphones, which surged by 9% and peaked at 16% after launching its first electric car model, the SU7, that received 90,000 orders within a few hours.
Manufacturing purchasing managers’ indices are also in focus, with figures above 50 indicating expansion. In March, India’s index stood at 59.1, up from 56.9 in February. In China, the Caixin index was at 51.1, while the US ISM index was at 50.3. At the Milan Stock Exchange today, among the main FTSE MIB stocks, Eni saw the highest increase at 2.80%, followed by another oil-related stock, Saipem, up by 2.21%. Nexi and StMicroelectronics also saw gains of 1.43% and 1.03% respectively. On the downside, Brunello Cucinelli saw a decline of 2.08%, followed by Diasorin at -1.70%. Stellantis and Telecom Italia also saw decreases of 1.29% and 0.93% respectively.
As concerns about escalating conflict in the Middle East persist, safe-haven assets like gold are reaching historic highs, trading at $2,255 per ounce. The rise in gold prices, paired with ongoing high interest rates and the possibility of rate cuts from central banks, reflects growing uncertainties in the market. Oil prices are also on the rise, with Brent surpassing $88 per barrel, driven by geopolitical tensions and production cuts by major oil-producing countries. European markets have reopened with modest gains, reflecting a mixed sentiment, while Asian markets, particularly in Hong Kong, saw significant increases fueled by positive developments from companies like Xiaomi. Manufacturing indices also show signs of expansion in countries like India and China, indicating some resilience in the global economy.
At the Milan Stock Exchange, energy and commodity-related stocks like Eni and Saipem saw notable gains, while technology and semiconductor companies like Nexi and StMicroelectronics also performed well. However, luxury fashion brands like Brunello Cucinelli and healthcare companies like Diasorin faced declines. Overall, the market fluctuations highlight the impact of geopolitical tensions on commodities and the stock market, with investors closely monitoring developments in the Middle East and central bank policies for potential shifts in the market. The performance of key indices and individual stocks reflects a mixture of optimism and caution as global uncertainties continue to influence market dynamics.
