FTSE MIB Falls Ahead of ECB Rate Decision Amid Expectations of Rate Hike
The FTSE MIB index fell by 0.5% to 51,875 on Wednesday in anticipation of the upcoming ECB rate decision. The market expects a rate hike by the European Central Bank, which could weigh on credit demand for investment in defense, AI, and energy transition.
Heavyweight financials declined as eurozone sovereign yields rose to multi-year highs, affecting the bank's balance sheets. Asset managers Azimut and Banca Mediolanum fell over 1.5%, adding to the pressure on banks' profits. Governments are seeking aid for budget deficits, with talk of taxing banks' profits intensifying.
Defense stocks were hit hard, with Leonardo plummeting by 4% and Fincantieri declining 3.6%. STMicroelectronics also fell by 1.1%, while Stellantis declined by 2.2% due to the growing electric-truck market in China affecting Western manufacturers.