Europe’s Stoxx 600 closes subdued as oil rally fades; Italian banks in focus

Published Tue, Jun 9, 2026 · 05:33 AM

[BENGALURU] Europe’s Stoxx 600 share index closed subdued but above session lows on Monday (Jun 8), as oil prices pared earlier gains following signs of a pause in attacks between Iran and Israel, while Italian lender Monte dei Paschi di Siena jumped after a takeover bid from rival Intesa Sanpaolo.

The pan-European Stoxx 600 index ended 0.2 per cent lower at 621.73 points, after hitting a two-week low earlier in the session.

Crude prices had climbed as much as 5 per cent after renewed Israeli strikes on Iran and attacks on Lebanon dampened hopes for a quick end to the conflict. But gains later narrowed to about 1 per cent after US President Donald Trump urged the two sides to “stop shooting”, and the announcement of a halt in attacks by Iran’s military helped steady sentiment.

Italy’s banking sector was the main corporate focus.

Monte dei Paschi di Siena (MPS) gained 13 per cent after Intesa Sanpaolo, Italy’s biggest banking group, announced a 30.6 billion euros (S$45 billion) unsolicited cash-and-share bid to buy the lender, in what could be one of Italy’s biggest banking deals. Intesa slipped 1.4 per cent.

“We would see the deal as positive for Intesa Sanpaolo in the longer term but see substantial uncertainty regarding execution,” said Suvi Platerink Kosonen, senior sector strategist at ING Bank.

Banco BPM has already proposed a merger with MPS, aimed at creating Italy’s second-largest domestic operator. Banco BPM shares were marginally higher. Kosonen said a BPM-MPS merger would leave Italy with three larger domestic banks, which would appeal to policymakers, while Intesa’s alternative could create a more diverse landscape with smaller players.

Tech rebounds, ECB decision in view

Technology stocks also supported the broader market as US tech names rebounded from a sharp sell-off late last week.

In Europe, the technology subindex was the day’s strongest performer, rising 1.3 per cent.

Investors are now focused on Thursday’s European Central Bank policy decision, with markets pricing in a 25-basis-point rate hike as the Iran conflict threatens to intensify Europe’s energy crunch and revive inflation concerns.

But with the eurozone economy weaker than during the 2022 energy crisis, the ECB faces a difficult trade-off between curbing price pressures and avoiding a deeper economic slowdown.

“The reflation trade, when growth picks up alongside inflation, is generally positive for stocks. However, stagflation, which the Eurozone is facing, generally leads to a worse outcome for markets,” said Kathleen Brooks, research director at XTB.

Among others, drugmaker Zealand Pharma tumbled 22.7 per cent after trial data for its injectable obesity drug survodutide showed high rates of patients quitting treatment due to side effects.

Goldman Sachs warned of downside risks for European chemicals, citing faster-than-expected demand destruction and pressure from Chinese exports. The chemicals sector was the worst performer, falling 1.5 per cent. REUTERS