Andrea Innocenti The Italian stock market had a positive day: at Piazza Affari, the main stocks rose by more than 2%, led by Buzzi, Nexi, and Technoprobe. At the same time, European government bonds saw a sharp decline in yields , while the BTP-Bund spread fell below 108 basis points.
Rising prices in Milan and sectoral movements
Among the best-performing stocks, Buzzi Nexi and Technoprobe posted gains of more than 2%. Conversely, STM fell 0,64% and Eni settled at 0,4% . Banca Generali shares were the best performers in the financial segment, rising 4,33% , signaling potential interest in a takeover of Generali. Its subsidiary Unicredit rose 0,84% and is expected to submit a bid for Generali's subsidiary (+1%).
Interpreting stock data
These movements reflect a combination of factors: confidence in the performance of the technology and banking sectors, along with speculation about potential M&A deals, which have fueled risk appetite. The most significant indicator remains government bond yields , which have directly influenced investors' appetite for riskier assets.
Reduction in sovereign yields and compression of spreads
The ten-year German Bund fell eight basis points to 3,42% , while the French OAT dropped three basis points, stabilizing at 4,88% . The ten-year BTP recorded a more marked decline: 4,64% in one of the two quotes, but the first source indicates 4,53% . In terms of differentials, the BTP-Bund spread fell from around 113 points to around 107-108 points, marking a significant reduction from the peaks of 150-160 points seen the previous week.
What is the spread?
The spread represents the difference between the yields of two government bonds and measures the risk premium perceived by investors. A compressed spread indicates reduced risk aversion and greater confidence in European sovereign bonds.
Geopolitical factors: Donald Trump's intervention
US President Donald Trump 's statements had an immediate impact on markets. Trump ruled out new attacks on Iran before the upcoming midterm elections, reducing geopolitical tensions and contributing to the oil price decline and improved risk aversion. Analysts attributed part of the recovery to profit-taking and short-covering, but the main calming factor was the easing of the conflict narrative.
Bond Market Reactions
The Bund fell five basis points to 3,44% , while OAT retreated 11 basis points to 4,75% . Greek, Portuguese, and Spanish yields also recorded declines of 11, 8, and 7 basis points, respectively. The British market reported a decrease of six basis points, settling at 5,36% . These changes helped the spread between OAT and Bund close at around 131 basis points, compared to 137 points the previous day.