FTSE MIB falls to two-week low as Middle East tensions weigh

The FTSE MIB fell to around 53,300 on Tuesday, hitting a two-week low, as fading hopes for a diplomatic resolution in the Middle East weighed on sentiment.

Iran signaled a tougher military response as negotiations stalled, while Washington declined to extend the temporary ceasefire.

The developments pushed oil prices higher, reinforcing inflation concerns, while surging bond yields added further pressure on equities by fueling expectations of tighter monetary policy and higher borrowing costs.

Financial stocks were among the early laggards, with UniCredit down 0.5%, Banco BPM 1.1%, BPER Banca 1%, and FinecoBank 0.9%.

Generali also fell 0.6% after JPMorgan cut its rating on the Italian insurer to “Neutral” from “Overweight,” despite raising its price target to €46 from €44.

Technology stocks also underperformed, with STMicroelectronics and Prysmian down 3% and 2%, respectively.