(Alliance News) - European stock exchanges on Tuesday closed down after veering into the red in the afternoon, with Jerome Powell acting as the "spoilsport" after the Federal Reserve's number one told the U.S. Congress that the central bank is ready to increase the pace of rate hikes if the totality of data indicate that faster tightening is warranted.

Powell also noted that the latest economic data have been stronger than expected, suggesting that the final level of interest rates will likely be higher than previously estimated to achieve a monetary policy stance tight enough to bring inflation back to 2 percent.

Eccles Building raised the target range for the federal funds rate by 25 basis points to 4.5 percent to 4.75 percent at its February 2023 meeting, reducing the size of the increase for a second consecutive meeting, but still pushing borrowing costs to the highest since 2007.

After Powell's words, in the CME Group platform's FedWatch Tool -- using futures also based on the actual federal funds rate, or EFFR -- the main rate hike for the March 22 meeting has a 48% probability of a hike in the 475/500 bps range. In contrast, the probability of an increase in the 500/525 bps area is at 52%. The current target is between 450 and 475 bps.

Thus, the FTSE Mib, closed in the red 0.7 percent to 27,761.57, the Mid-Cap gave up 0.7 percent to 44,821.93, the Small-Cap gave up 0.2 percent to 30,481, while Italy Growth is down 0.3 percent to 9,473.01.

In Europe, London's FTSE 100 gave up 0.2 percent, Paris' CAC 40 gave up 0.5 percent, while Frankfurt's DAX 40 left 0.6 percent on the parterre.

On the main list, Saipem gave up 3.4 percent, with price at EUR1.4280. Of note, Voleon Capital Management on Monday raised its short position on the stock to 0.61 percent from 0.55 percent.

Nexi, which had opened at the top, gave up 3.1 percent, however, after approving on Monday its consolidated financial results as of December 31, 2022, reporting revenues of EUR3.26 billion and up 7.1 percent from EUR1.61 billion in 2021. Net income amounted to EUR693.2 million up 15 percent from EUR602.4 million in 2021.

Also at the back of the pack was Telecom Italia, which fell 2.3 percent after two sessions ended in the green.

Banca Mediolanum closed in the black by 0.1 percent after reporting Tuesday that it recorded net inflows of EUR1.46 billion in February, bringing its total for the first two months of 2023 to EUR2.15 billion. Managed assets net inflows are EUR526 million, bringing the total since the beginning of the year to EUR1.01 billion, while new loans disbursed in February amounted to EUR266 million, bringing the cumulative to EUR498 million. Protection policy premiums rise to EUR14 million in February from EUR13 million in January.

Good session also for Unipol, which brings home a gain of 0.9 percent to EUR5.1220 and closing for the third session in a row in the black.

On the Mid-Cap, Banca Monte dei Paschi gives up 3.3 percent, following up on the eve's red, albeit by 0.5 percent.

The board of directors of Ascopiave - down 3.7 percent - on Tuesday approved the draft financial statements for fiscal year 2022, which closed with a consolidated net result of EUR32.4 million, showing a reduction of EUR12.9 million compared to the previous year, thus a decrease of 28 percent, "mainly due to the decrease in the results of the investee EstEnergy," the company specifies in the note released. The board proposed the distribution of a dividend of EUR0.13 per share.

Anima Holding - in the red by 1.4 percent - reported on Monday that net inflows from assets under management in February 2023 were positive by EUR383 million, with a negative asset management component of EUR90 million and one related to class I insurance proxies positive by EUR373 million.

Positive notes included Saras, which marked a gain of 0.7 percent after the eve's 1.1 percent decline. The stock had previously come from four bearish sessions.

Cembre, on the other hand, advanced 2.7 percent with price at EUR30.50, taking the lead and closing in the black for the third session in a row.

On the Small-Cap, SAES Getters retreats 4.1 percent after a 1.5 percent gain on the eve of the session.

B&C Speaker, on the other hand, gives up 3.9 percent after eve's 1.8 percent profit.

TXT e-solutions - in the red by 0.3% - announced Monday that it has won lot 2 of the open tender for the contracting of cloud application services and demand and pmo services for central public administrations.

Fiera Milano -- down 0.5 percent -- will enter the capital of Fiere di Parma through a reserved capital increase, the Milan-based company announced Tuesday. Fiere di Parma's shareholders' meeting will be called to approve a capital increase having as its object 576,587 ordinary shares, with a total value of EUR16.5 million, equal to about 19% of Fiere di Parma's share capital, reserved for subscription by Fiera Milano and to be released through the contribution in kind of the TuttoFood business unit.

At the top is Mondo TV, up 14 percent, in its third bullish session.

Among SMBs, GO Internet advanced 3.9 percent, up 3.4 percent, after eve's 3.5 percent retreat from red.

ESI, on the other hand, closed down 11 percent. The company announced Monday that its board of directors has approved a capital increase of up to EUR3.5 million in total by issuing ordinary shares to be offered under option to shareholders.

The board of Health Italia -- down 3.2 percent -- on Monday reviewed consolidated revenues as of December 31, 2022, which amounted to EUR42.5 million, up 4.8 percent from EUR40.5 million in the same period last year.

TMP Group, on the other hand, gave up 3.9 percent. The company said Monday that the board of directors reviewed the unaudited consolidated production value as of December 31, 2022, which came in at EUR6.5 million, up 14 percent from EUR5.7 million pro forma in 2021.

In New York, the Dow is giving up 1 percent, the Nasdaq 0.6 percent, and the S&P 500 is down 0.9 percent.

Among currencies, Powell's words equally triggered selling on the euro and the pound. The single currency changed hands at USD1.0579 versus USD1.0677 at Monday's close. In contrast, the pound is worth USD1.1856 from USD1.2031 on Monday evening.

Among commodities, Brent crude is worth USD84.10 per barrel versus USD85.93 per barrel on Monday evening. Gold, on the other hand, trades at USD1,820.67 an ounce from USD1,850.70 an ounce at Monday's close.

On Wednesday's calendar, at 0800 CET comes the German industrial production data along with retail sales. At 1000 CET it is the turn of Italian retail sales and at 1100 CET Eurozone GDP.

At 1300 CET comes the rate and mortgage applications from the US, while at 1415 CET it will be the turn of the change in agricultural employment, followed at 1430 CET by the trade balance.

From 1600 CET onward, Federal Reserve Chairman Powell's congressional hearing will be held, while at 1600 CET there will be the interest rate decision by the Bank of Canada.

At 1630 CET the EIA and Cushing oil stocks.

Among companies, however, results from Banca Generali, Banca Monte dei Paschi di Siena, BFF Bank and Italmobiliare are expected.

By Maurizio Carta, Alliance News reporter

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