(Alliance News) - On Wednesday, European stock markets began trading with the sell side dominating volumes in the wake of declines seen on Wall Street, spurred by aggressive remarks from major central banks that saw investors go to recalibrate interest rate cut expectations.

On Tuesday, Federal Reserve Governor Christopher Waller indicated that the central bank may not cut rates as aggressively as the market expects, echoing European Central Bank officials who have opposed accommodative posturing in the trading rooms.

In swap markets, meanwhile, expectations for Bank of England rate cuts this year are recalibrating after U.K. inflation unexpectedly rose to 4 percent in December, above market forecasts of 3.8 percent. This is the first increase in the inflation rate in ten months.

The market's implied probability that the first rate cut will occur in May has fallen to 58 percent, from more than 80 percent prior to the release of the inflation figure. Traders are discounting cuts of 112 basis points for the year, down from 124 basis points on Wednesday morning.

Thus, the FTSE Mib is giving up 0.9 percent to 30,069.90.

In Europe, the CAC 40 in Paris is contracting 1.2 percent, the FTSE 100 is giving up 1.4 percent, and the DAX 40 in Frankfurt is posting minus 1.0 percent.

Among the smaller listings, the Mid-Cap is giving up 0.8 percent to 43,957.12, the Small-Cap is in the red 1.0 percent to 27,310.18, while Italy Growth is giving up 0.1 percent to 8,233.59.

On the Mib, among the few bullish performers is Telecom Italia advancing 3.0% to EUR0.2919. As part of activities aimed at the closing of the NetCo divestment transaction and following the signing of the transaction agreement with Optics BidCo - a subsidiary of KKR -, it announced on Wednesday that it had received approval to execute the transaction for the purposes of Golden Power regulations.

Pirelli, on the other hand, is giving up 1.5 percent to EUR5.12 per share, after Tuesday evening's fractional green.

Tenaris, on the other hand, is stepping back 1.3 percent, in its third session on the bearish side.

Enel Finance International -- a financial subsidiary of Enel -- reported that it has launched a two-tranche "Sustainability-Linked bond" on the Eurobond market aimed at institutional investors for a total of EUR1.75 billion. The stock paerto trade at a loss of 1.1 percent.

On the Mid-Cap, Digital Value is stepping back 2.2 percent to EUR56.70 per share, in its third session with a bearish candle.

Maire Tecnimont--down 0.7%--reported Wednesday that its subsidiary Tecnimont has been awarded a front-end-engineering design contract for a green ammonia plant in Norway. The contract was awarded by Fortescue, a global company active in green technologies, energy and metals.

Sales also on Carel Industries, which is stepping back 1.8 percent in the wake of the previous two bearish sessions.

Among the few bullish performers is Webuild, which is moving ahead 1.8 percent, in the aftermath of a 1.1 percent decline.

On the Small-Cap, Tessellis rises 5.3% with price at EUR0.5790, up after two sessions closed among the bearish.

Good buying also on SoftLab, which moves ahead 3.5 percent. The stock-which has been missing the ex-dividend since 2003-seeks its third session on the bullish side of the list.

Fidia, on the other hand, gives up 4.4 percent, bringing its loss on a weekly basis to minus 34 percent.

Not far behind, Gabetti is giving up 5.6 percent with new price at EUR0.73. The stock-with the vallutation of only one anlista in the MarketScreener platform-expresses a target price of EUR1.50, thus being underpriced by more than 93%.

Among SMEs, Company of the Caribbean is advancing 3.2 percent, following a negative balance of 5.0 percent in the previous session.

CleanBnB, on the other hand, is advancing 3.1 percent, following a 3.0 percent negative balance in the previous session.

Deodato.Gallery, on the other hand, gives up 4.3%, with price at EUR0.42 on the heels of the previous session's negative balance that closed with the same loss.

Among the U.S. exchanges on the European night, the Dow gave up 0.6 percent, the S&P 0.4 percent while the Nasdaq lost 0.2 percent.

In Asia, the Nikkei gave up 0.4 percent, the Hang Seng ended 3.7 percent in the red while the Shanghai Composite closed 2.1 percent down.

Among currencies, the euro changed hands at USD1.0867 against USD1.0878 recorded in Tuesday's European stock close while the pound is worth USD1.2654 from USD1.2659 last night.

Brent crude is worth USD76.95 per barrel versus USD78.46 per barrel at Tuesday's close. Gold, meanwhile, trades at USD2,021.69 an ounce from USD2,033.83 an ounce last night.

On Wednesday's economic calendar, at 1100 CET will come Eurozone inflation.

At 1300 CET, eyes on the US mortgage rate report while, at 1430 CET, it will be the turn of the US retail sales data. At 1515 CET, the industrial production figure is expected while at 1615 CET, ECB number one Christine Lagarde will speak.

Finally, at 2230 CET, from the US will come the data on weekly oil inventories.

On the corporate calendar in Piazza Affari, no special announcements are expected.

By Maurizio Carta, Alliance News reporter

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