Indices edged lower at Piazza Affari in a subdued European context, weighed down by sell-offs in industrial and healthcare sectors.

Caution prevailed among investors during a week marked by anticipation of August PCE data--a key inflation measure closely watched by the Federal Reserve--which is set to be released tomorrow. This afternoon, the final reading of second-quarter GDP is also expected. Additionally, further clues on the next moves by the U.S. central bank may emerge today from scheduled remarks by several policymakers.

Markets are now pricing in almost fully--a 92% probability--a further 25 basis point rate cut at next month's meeting.

Around 1 p.m., the FTSE Mib index was down 0.21%, with trading volumes just over 1 billion euros.

Stocks in Focus Today

** Profit-taking continued in the banking sector, with major players INTESA SANPAOLO and UNICREDIT down 0.4% and 0.10% respectively. Both banks received a rating upgrade from Fitch today, following last Friday's upgrade of Italian sovereign debt to A- with a stable outlook. MPS and MEDIOBANCA were also sold off. BANCO BPM, however, gained 1.5% after Goldman Sachs initiated coverage with a 'buy' rating and a target price of 15.7 euros.

** The defense sector remained volatile, at the mercy of developments related to the war in Ukraine, and saw a pullback after yesterday's rally. LEONARDO slipped 0.7% and FINCANTIERI lost 1.4%.

** CUCINELLI was hit hard, falling into a volatility auction with a 4.95% drop, after a Morpheus Research report--disclosing a 'short' position on the stock--put pressure on its shares.

** RECORDATI fell 1.4%, penalized by the negative performance of the European healthcare sector, particularly Germany's med-tech firm SIEMENS HEALTHINEERS, which dropped over 4% after the U.S. Department of Commerce announced new national security investigations into imports of personal protective equipment, medical items, robotics, and industrial machinery.

** The cement sector also saw sharp declines, with BUZZI down 4.3%.

** SAIPEM was well-bid, gaining 2.76% on the day of its extraordinary shareholders' meeting, which approved the merger with Norway's Subsea 7. However, the deal faces uncertainty after rivals Petrobras, Exxon Mobil, and TechnipFMC asked Brazil's antitrust authority Cade to block the merger or impose remedies to preserve competition in Brazil. According to a trader, the market appears to welcome the possibility that the Italian firm could remain independent should obstacles arise to the merger. UBS also initiated coverage today with a 'buy' rating and a target of 3 euros.

** Both ordinary and savings shares of TIM advanced around 1.7%.

** Lastly, MFE A and B shares rose approximately 0.4% following first-half results in line with expectations.

(Giancarlo Navach, editing by Sabina Suzzi)