Weakness continues in Piazza Affari, as well as on other European stock exchanges, Paris in the lead, in a session characterized by extreme investor caution, also evidenced by the sagging performance of futures on Wall Street.

Fears over the impact of U.S. President-elect Donald Trump's policies on new tariffs and the anticipation of U.S. macro data on the afternoon agenda are restraining investors from taking positions also in light of increased recent intraday volatility.

On the U.S. macro front, the main focus will be on the Fed's most closely watched price data, namely the October Pce, which is expected to accelerate slightly on a trend basis.

Stock markets seem to be ignoring news on the geopolitical front, such as the agreement reached yesterday between Israel and Hezbollah for a 60-day ceasefire, while weighing on European stock markets is the negative performance of French equities.

Indeed, the Paris Cac 40 lost more than 1 percent after fears over political developments and the government's difficulties in approving the budget for next year are causing the spread between French and German 10-year yields to widen, weighing down banking stocks, but with no particular impact on the Italian sector.

In Milan, around 1:20 p.m., the Ftse Mib is down about 0.7 percent.

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At the bottom of the main list, Stellantis loses 2.9% with the entire European automotive sector weak on fears related to the threat of U.S. duties for products imported from Mexico.

In the rest of the sector, among Italian companies exporting from Mexico to the U.S., Brembo loses 0.7% while in contrast Pirelli gains 0.8%. Equita believes that "the concern about sudden interventions of significant amounts is excessive" and recalls that "Trump had already ridden this scenario in the previous term, but four years later there has been no upheaval in the footprint of the main players."

Also heavy was Stm, down 2.4 percent amid general losses on the continental tech sector.

Generally sluggish banking stocks, under the spotlight for a sharp acceleration in consolidation in the sector after UniCredit's bid for Banco Bpm. The Piazza Gae Aulenti bank's stock gives up a marginal 0.3 percent, while the Piazza Meda stock rises 0.7 percent buoyed by market bets on a bid revival. Better is Mps, up 1.9 percent.

Also down are insurers Generali at -2.8% and Unipol down nearly 2%.

Buyers, however, on Saipem, which gains 0.7% buoyed by news on the award of a major new offshore contract in Indonesia worth $1 billion.

(Andrea Mandalà, editing Stefano Bernabei)