Stocks under pressure to start the week

There’s been more selling in European stock markets this morning with the heaviest fall seen in Milan, where the leading Italian benchmark has declined by more than 2% to fall close to an 18 month low. Despite the European Commission announcing its concern with the recent budget deficit plans from the Italian government, it seems that Rome refuses to back down with deputy PM Salvini stating that they will not backtrack despite what he calls “market pressure”. This “market pressure” is clearly seen not just in stocks but also bonds, with the yield on the 10-year hitting a new 4 ½ year high while the spread for the same instrument over its Spanish equivalent has widened to levels not seen in two decades.      

Oil drops on talk of Iran sanction waivers

There’s been a notable pullback in the price of oil this morning with Brent crude falling back near its lowest level of the month on reports that the US is considering granting some countries waivers on its Iranian sanctions. There’s been a strong push higher in the oil price this past fortnight with concerns surrounding a supply shortage seeing the market reach its highest level in over 4 years last Wednesday. The chief worry behind this was the imminent US sanctions on Iran which would disrupt the supply of one of the larger suppliers of crude, but these latest events challenge that narrative. US sanctions against Tehran are scheduled to begin on November 4th, and Washington has been putting pressure on governments and companies worldwide to cut their imports to zero. However, comments from a government official that the US could consider exemptions for nations that have shown efforts to reduce their Iranian oil imports and news that India will buy 9m barrels from the county next month suggest that exports won’t fall to nothing from November.

French Connection jumps while Aston Martin slumps lower

There’s been a sharp move higher of more than 25% in the stock of French Connection this morning with rumours of a possible sale seeing investors rush to buy the stock. The struggling fashion chain has said that it is “reviewing all strategic options”, which has clearly been taken as meaning that a potential sale is on the cards. Sports Direct and House of Fraser owner Mike Ashley is a familiar face in the frame as potential buyers go, already holding a stake of 27% in the firm. One stock that isn’t performing quite so well is Aston Martin with the stock extending the declines seen since last week’s offering. The share price has now fallen down to near the £16 mark, representing a drop of more than 15% in just a few days since floating last Wednesday.