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Italian Stocks Decline; Mediolanum, Pirelli, Popolare, STM, UniCredit Move

Italy’s benchmark FTSE MIB Index fell for a second day, losing 375.43, or 1.8 percent, to 20,365.30 at the 5:30 p.m. close in Milan.

The following stocks were among the most active in the Italian market today.

A2A SpA (A2A IM) increased 1.9 percent to 1.14 euros, a third straight gain, as BofA Merrill Lynch Global Research upgraded Italy’s biggest municipal utility to “buy” from “neutral.”

The company said its board reviewed a report prepared by its financial adviser Intesa Sanpaolo SpA on the company’s strategy. The strategy review is continuing, A2A said in a stock-exchange statement.

Banca Monte dei Paschi di Siena SpA (BMPS IM) fell 2.1 percent to 1.02 euros, snapping a two-day gain. Fitch Ratings lowered the bank’s long-term credit rating to A- from A.

Banco Popolare SC (BP IM) lost for a second day, declining 2.6 percent to 4.66 euros. The lender’s shares dropped below their 50-day moving average after falling below their 200-day moving average yesterday.

Gruppo Coin SpA (GCN IM) increased 2 percent to 6.89 euros, erasing the decline yesterday. The department store chain said fiscal first-half earnings before interest, tax, depreciation and amortization rose 26 percent to 61.1 million euros, according to a statement distributed by the Italian exchange.

Mediaset SpA (MS IM) ended a two-day increase, falling 2.5 percent to 5.18 euros as media stocks dropped across Europe today.

Mediobanca SpA (MB IM) advanced for a third day, rising 1.1 percent to 6.87 euros. The investment bank wants to continue to pay dividends, Chief Executive Officer Alberto Nagel said. Intermonte Sim SpA lifted its recommendation to “outperform” from “neutral.”

Separately, la Repubblica reported that one of the reasons that Alessandro Profumo was replaced in UniCredit SpA is because he opposed a plan by Assicurazioni Generali SpA Chairman Cesare Geronzi to merge Mediobanca with the insurer and then possibly Mediolanum SpA (MED IM).

“The merger seems unlikely, but not impossible and Profumo was certainly strongly opposed to the idea,” Equita Sim SpA said in a note. Mediolanum, the financial-services company partly owned by Italian Prime Minister Silvio Berlusconi, advanced 4.8 percent to 3.25 euros.

Pirelli & C. SpA (PC IM) dropped 2.5 percent to 5.74 euros, the biggest loss in more than a month. Morgan Stanley downgraded Europe’s third-largest tiremaker to “underweight” from “overweight.”

Prysmian SpA (PRY IM), the world’s second-biggest cable maker, fell for the first time this week, losing 2.9 percent to 13.24 euros. Mediobanca Securities reiterated an “underperform” rating on the stock.

STMicroelectronics NV (STM IM), Europe’s largest semiconductor maker, fell for the first day in four, losing 2.5 percent to 5.68 euros as the Philadelphia Semiconductor Index headed for the biggest loss in more than three weeks.

Telecom Italia SpA (TIT IM) fell for a second day, losing 1.8 percent to 1.02 euros. Equita Sim SpA downgraded Italy’s biggest phone company to “hold” from “buy” and reduced the weighting of the stock in its main portfolio to “neutral weight.”

UniCredit SpA (UCG IM) lost 4 percent to 1.82 euros, extending losses of 2.1 percent yesterday. Cheuvreux downgraded Italy’s biggest bank to “underperform” after Chief Executive Officer Alessandro Profumo resigned, while Keefe, Bruyette & Woods Ltd. lowered its rating to “market perform.” Societe Generale SA trimmed its price estimate to 2.1 euros from 2.3 euros.

Credit Suisse Group AG reiterated an “outperform” rating on the stock “although the sudden and unexpected resignation of the CEO and, most importantly, the uncertainties about the appointment of a successor and about the strategy of the bank going forward are likely to weigh negatively on the share price in the short term.” Deutsche Bank AG and BofA Merrill Lynch Global Research kept a “buy” rating.

To contact the reporter on this story: Francesca Cinelli in Milan at fcinelli@bloomberg.net.

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net.

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