European markets closed in positive territory, buoyed by a volatile start to trading in New York. Paris led the gains (+1.00%), followed by Milan (+0.80%), Madrid (+0.75%), Frankfurt (+0.55%), and London (+0.30%).
The closely watched spread between Italian and German 10-year government bonds widened to nearly 80 basis points. The yield on the Italian BTP rose by 13 basis points to 3.57%, while the yield on the German Bund increased by 5 basis points to 2.77%. The spread with French bonds also rose to 116 basis points, as the French OAT yield gained 2 basis points to 3.45%.
Investor attention remains focused on negotiations to end the Russia-Ukraine war and the upcoming Federal Reserve symposium in Jackson Hole, which begins in two days.
Luxury stocks were among the top performers, with Moncler (+4.6%), Kering (+3.0%), Burberry (+3.95%), and Swatch (+3.53%) all posting significant gains. Automakers were also in the spotlight, with Porsche (+3.0%), Renault (+2.63%), and Stellantis (+1.77%) advancing. Conversely, the prospect of a potential peace deal weighed heavily on the defense sector, sending shares of Leonardo (-9.5%), Hensoldt (-8.32%), Saab (-8.21%), and Rheinmetall (-5.52%) sharply lower.
Campari (+3.35%) performed strongly, alongside rivals Pernod Ricard (+3.26%), Diageo (+2.85%), and Carlsberg (+2.71%). In the banking sector, Commerzbank (+2.77%), Intesa Sanpaolo (+2.1%), Monte dei Paschi (+1.85%), Mediobanca (+1.7%), Société Générale (+1.35%), and UniCredit (+1.27%) stood out. Gains were more modest for Popolare di Sondrio (+0.76%), Banco BPM (+0.70%), and BPER Banca (+0.15%).