FTSE MIB Falls on Middle East Tensions and Budget Deficit

The Italian FTSE MIB fell 2% to close at 46,280 on Monday, as rising tensions in the Middle East triggered a broad risk-off move across financial markets. In addition, Italy's budget deficit last year failed to fall inside the European Union's ceiling as targeted by the government, casting a shadow over Rome's hopes of an early exit from an EU disciplinary procedure. Financial stocks underperformed, with UniCredit down 3% and Intesa Sanpaolo losing 3.9% as the combination of poor fiscal data with higher inflation expectations from soaring gas prices drove BTP yields to surge. In contrast, energy-related stocks were lifted as the disruption of oil exports in the Persian Gulf triggered a surge in energy prices, with Eni surging 3.6%. Also, Leonardo climbed 2.5% on the rising geopolitical tensions.

The FTSE MIB Index decreased -925 points or 1.96 percent on Monday to close at 46284 points. The decline was led by Stellantis N.V. (-7.16%), Unipol Gruppo (-4.40%) and Bper Banca (-3.93%).

The Italian FTSE MIB dropped more than 2% to around 46,000 in early trading on Monday, retreating from record levels, as rising tensions in the Middle East triggered a broad risk-off move across financial markets. The downturn followed a wave of US and Israeli strikes on Iran over the weekend, which prompted Tehran to launch counterattacks in the region, deepening geopolitical uncertainty. Most stocks were in the red, including UniCredit (-4.2%), Intesa Sanpaolo (-4.4%), Ferrari (-2.7%), Assicurazioni Generali (-3.2%), STMicroelectronics (-2.9%), and Banco BPM (-4.2%). On the upside, oil-related and defense stocks were in the green, with energy firm Eni rising nearly 4% and defense company Leonardo climbing more than 4%. On the data front, Italy is set to release its February manufacturing PMI and full-year GDP growth for 2025.