Piazza Affari opened near break-even amid slightly lower European markets, as the situation in the Middle East shows no signs of improvement and the AI and tech stock frenzy begins to cool.

Around 9:30, the FTSE Mib is down 0.2%.

However, rather than the international backdrop, the Italian market is dominated by dramatic developments in banking consolidation.

MPS, caught in a tug-of-war between Intesa Sanpaolo and Unipol-BPER on one side and Banco BPM on the other, is up over 9%. Mediobanca, the primary target of Intesa's takeover bid, is gaining just over 8%. BPER, which would form a hub with MPS should the Intesa deal proceed, is rising nearly 5%. Generali is also buoyant (+1.9%) following Intesa's acquisition of a 3% stake.

The financiers of these deals are retreating: Intesa is down 3.8%. Unipol is flat. The rival suitor for MPS, Banco BPM, is shedding 1%.

UniCredit, which currently appears sidelined from this round of deal-making, is losing 0.9%, in line with the European banking index.

Meanwhile, rising crude prices are supporting energy stocks, while the automotive sector (Stellantis -2.4%) and luxury goods are trading lower.

(Claudia Cristoferi, editing Stefano Bernabei)