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Milan stocks up ahead of Fed: UniCredit and Ferragamo rise

by Flavia Carletti

It was a positive session for the Milan market, which closed higher ahead of a decision by the US Federal Reserve on interest rates. The FTSE Mib ended up by 0.81% and the FTSE All Share by 0.83% thanks to a strong showing by some blue chips like UniCredit and upbeat news on the European macroeconomic front.

Europe’s Markit Pmi for manufacturing rose to 55.2 from 54.9 in December, a record for the past 69 months and above the flash estimate of 55.1. In Italy, however, manufacturing was down, with the index lower than its been in two months.

UniCredit grabbed center stage ahead of a board meeting to set the terms of the bank’s anticipated €15 billion capital increase.

After a volatile first half of trading, UniCredit rose steadily in the second to close up 5.7% at €26.6, after hitting a session high of €26.63. It was one of the best performers among large cap stocks on a positive day for the banking sector in Italy and across Europe.

Ferragamo was also a star after posting financial results that showed revenue up 1% at constant exchange rates (an exchange-rate adjusted 4%) in the fourth quarter.
Shares of the luxury goods group ended up 6.63% to €26.07. Full year revenue fell 2% at a constant exchange rate but was up 1% adjusted for currently fluctuations, to €1.44 billion.

“Revenues improved in the fourth quarter of 2016 — the retail network in particular,” Banca Akros said in a note. The bank kept its “neutral” rating but boosted its target price from €22.6 to €25.

Analysts at Equita also rated the shares a “hold” but with price target of €27.2.

Safilo fell the day after its quarterly results and on jitters that the eyewear group will lose Dior and Lvmh, major accounts. Marcolin yesterday signed an agreement with the French luxury goods giant to create a joint venture to manufacture eyeglasses for Celine and Louis Vuitton, with the goal of becoming the preferred partner for Lvmh’s entire portfolio of brands. The shares plunged by 7.5% to €6.35, one of the worst performers of the day.

On the upside, Stm gained ground after solid financial results from Apple, one of its major customers. Shares ended the session up 3.45% at €12.6, after hitting €12.75.

Apple’s revenue rose in the fourth quarter thanks in part to sales of the iPhone 7, which includes a component from Stm.

Leonardo recovered from news of a guilty verdict for CEO Mauro Moretti in connection with a fatal train crash during the period when he was head of railways group Ferrovie Italiane. The shares ended up 3.44% to end at €12.33.

On Tuesday, a court in Lucca sentenced the former CEO of the national railway to seven years for negligence in transporting train cars full of dangerous substances in highly populated areas at high speed — a situation that caused a 2009 rail disaster in Viareggio where 32 people died.


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