Uncertainty dominates the markets following the latest escalation of tensions in the Middle East. However, investors remain hopeful that new US strikes against Iran, following the downing of an Apache helicopter near the Strait of Hormuz, will not jeopardize a potential peace agreement to end the war.
Brent crude prices, meanwhile, remain below 100 dollars per barrel.
On the macro front, the spotlight shifts to US inflation data due this afternoon to gauge the war's impact. According to a Reuters poll of economists, May consumer prices are expected to have risen at their fastest pace in three years.
The reading could bolster expectations of a Federal Reserve rate hike, particularly following last week's stronger-than-expected May non-farm payrolls data.
As of 12:40 PM, the FTSE Mib is posting a fractional decline of 0.2% after trading in positive territory during the early part of the session.
US equity futures are also weak, pointing to a soft opening on Wall Street.
Today's featured stocks
** The banking index is flat. INTESA, which announced a public exchange offer (Opas) to acquire MPS, is down 1.15%. Shares in the Sienese bank are also flat after hitting new highs since July 2022 at 10.65 euros. Subsidiary MEDIOBANCA is down 0.2% after reaching new all-time highs of 25.54 euros.
** UNIPOL shows good momentum, rising 1% following its recent rally and new highs since October 2008 at 23.25 euros. Conversely, its investee BPER is down 0.6% as the market weighs the expected benefits of the MPS transaction in agreement with Intesa. In a note, Barclays reiterated its 'positive stance on Intesa and Bper as the announced MPS deal creates value for both'.
** Stronger buying interest is seen in BANCO BPM (+3.2%), which had remained somewhat sidelined, and UNICREDIT (+0.6%).
** Elsewhere in the blue-chip index, STM is up 1.6% following an upgrade by BofA to 'buy' from 'neutral' and a price target increase to 86 euros, forecasting a significant profit turnaround for the Franco-Italian chipmaker.
** The energy sector is overlooked, while CAMPARI is under pressure, falling 1%.
** Football stocks are seeing some action, with LAZIO and JUVENTUS rising 5.7% and 3.8% respectively.
** Finally, CEMENTIR continues its surge, rising approximately 5% following a similar jump yesterday. This follows the announcement that its Danish subsidiary, Aalborg Portland, signed a 2.2 billion agreement with the Danish Energy Agency for subsidies related to a carbon capture and storage (CCS) project. According to Equita's daily note, 'the subsidy improves the financial sustainability of the project'.
(Giancarlo Navach, editing Claudia Cristoferi)
