Milan Stock Exchange Slides as Middle East Tensions Escalate

Milan’s stock exchange experienced significant losses on Tuesday, continuing a downward trend sparked by escalating tensions in the Middle East following attacks by the United States and Israel on Iran. The FTSE Mib index closed at 44,335 points, down 4.1%, mirroring declines across other European markets.

Market Impact and Key Declines

The escalation in the Middle East, and the resulting fears of a prolonged conflict, are weighing heavily on investor sentiment. Several key sectors experienced substantial declines:

• Saipem: Suffered a significant drop of 7.3%.
• Banking Sector: Faced broad selling pressure, with Unipol losing 6%, Unicredit declining by 5.4%, Mediobanca falling 5.1%, and MPS down 4.1%.
• Utilities: A2a, Italgas, Enel and A2A all experienced declines of over 5%.
• Luxury Goods: Moncler and Italgas likewise saw declines of 5.5%.
• Industrials: Tim and Prysmian both fell by 5.4%.

Positive Performers and Sector Divergence

Despite the overall negative trend, some companies bucked the downturn:

• Lottomatica: Rose 4.6% following the release of strong 2025 financial results, with collections up 14%, revenues up 12%, and net profit increasing by 45%.
• Defense and Energy: These sectors generally benefited from the geopolitical uncertainty, although gains were modest for Recordati (-0.7%), Iveco and Leonardo (-0.9%).
• Eni: Remained relatively flat after recent gains driven by rising oil and gas prices.

Broader Economic Context

The spread between Italian BTPs (government bonds) and German Bunds currently stands at 68 basis points, with the yield on the Italian ten-year bond at 3.48% (ANSA). Oil prices have surged due to disruptions in Middle Eastern refineries and shipping routes, particularly through the Strait of Hormuz, a critical passageway for approximately 20% of the world’s oil supply (Marketscreener). Brent futures were up $3.15 at $80.89 per barrel, and supertanker shipping costs have reached all-time highs. Gas prices have also increased following Qatar’s suspension of liquefied natural gas production, which accounts for roughly 20% of global supply (Marketscreener).

Looking Ahead

The Milan Stock Exchange, along with other European markets, is expected to remain volatile in the near term as the situation in the Middle East continues to unfold. Investors will be closely monitoring geopolitical developments and their potential impact on energy prices and global economic stability.