Asian markets also rallied, led by Tokyo where the Nikkei closed up more than 5%.
One trader noted that while the jump reflects relief over the avoidance of further devastating strikes in Iran, it remains a temporary truce and its durability is yet to be tested. From a technical standpoint, many stocks were heavily oversold, triggering a wave of short-covering.
Several stocks faced volatility halts at the opening bell.
As of 9:55 CET, the FTSE Mib index is trading up 3.5%.
Notably, heavy speculation on Brent crude is unwinding, with futures tumbling over 14% to below 95 dollars per barrel.
The impact on the oil sector was inevitable: ENI is the session's worst performer, shedding over 8%. Oil services firms are also down sharply, with TENARIS losing 3.7% and SAIPEM falling 2.2%. In its daily note, Equita wrote that the ceasefire announcement is "negative news for the sector, as it removes part of the 'war premium' and signals an initial easing of tensions, putting pressure on oil prices and potentially on refining margins."
Banking stocks are up strongly, with the sector index rising 6.6%, driven primarily by UNICREDIT, which is up 8% and carries significant weight in the blue-chip index. Other banks are also racing ahead with gains exceeding 6%.
STM continues its rally, climbing 5% to hit new highs since late July 2024 at 32.595 euros.
Sectors recently hit by selling pressure on recession fears, such as industrials and luxury goods, are recovering sharply. STELLANTIS jumped 6.3% and FERRARI 6.7%. In the luxury segment, BRUNELLO CUCINELLI is up 7%, followed by MONCLER at +6.6% and FERRAGAMO at +4.4%.
Cement producers are also performing well on expectations of post-war reconstruction, with BUZZI advancing over 8% and CEMENTIR up 7.2%.
The rise in LEONARDO (+1.1%) is more contained following yesterday's heavy losses, as the market remains wary of the possible replacement of CEO Roberto Cingolani in the upcoming round of state-owned enterprise appointments. FINCANTIERI is up 2.8%.
Finally, BFF BANK continues its rally today after yesterday's 10% surge. The stock had collapsed last week following news of a Bank of Italy measure appointing two temporary commissioners to work alongside the Board to address certain financial and internal control issues at the institution.
(Giancarlo Navach, editing by Francesca Piscioneri)
