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Milan stocks end on a good note as professional investors see clearer sky ahead

by Eleonora Micheli

European stock prices closed mixed, as investors digested corporate earnings and worried about a possible worsening of US relations with Iran, Mexico and Australia after remarks by President Donald Trump and his administration.

The German DAX was the worst performer in the region as index heavyweights Deutsche Bank and Daimler dipped in the wake of disappointing earnings reports. London closed higher, boosted by dovish remarks by the Bank of England, which kept its monetary policy steady as expected. The Bank of England decided to keep the bank rate at 0.25%.

The London FTSE 100 closed up 0.47% at 7,140.75 points, the Frankfurt DAX dipped 0.27% to 11,627.95 points, the Paris CAC 40 ended down 0.01% at 4,794.29 points, in Milan the FTSE MIB rose 0.79% to 18,889.19 points and in Madrid the IBEX 35 climbed 0.81% to 9,406.40 points.

On a positive note, Italian CFA-certified professional investors turned more optimistic in February about the country's economic prospects, according to the monthly survey carried out by CFA Society Italy in collaboration with Il Sole 24 Ore Radiocor Plus.

The sentiment index in February jumped to 14 points compared to a reading of 5 in January.
Of the 50 investors polled between January 20-31, 65% said economic conditions in Italy remained stable from the previous month. Asked about their expectations for the next six months, the share of those predicting an improvement increased by 5 points to 28%, while 58% said they expect stability and 14% forecast a decline.

Also contributing to brighten up investors’ mood, the differential between yields on 10-year Italian government bonds and their German counterparts ended down to 1.80 percentage points from 1.84 points at the close on Wednesday.

Among stocks, shares in Italian luxury sports car maker Ferrari rose 3.73% after posting higher 2016 results and giving a positive outlook for 2017.

“Fourth quarter results were better than expected and indications of profitability prospects are good,” analysts at Banca Akros said. Ferrari posted revenue of €3.105 billion in 2016, up a reported 8.8% on the year earlier and 9.4% higher at constant currency rates. In 2017, Ferrari said it expects revenue to surpass €3.3 billion, as it forecasts deliveries of about 8,400, including supercars.

In the financial sector, shares in UniCredit dropped 1.65% to €26.16 after swinging between gains and losses following the announcement yesterday of the terms of its €13 billion capital increase.

Investors were cautious on the sector after Deutsche Bank (-4.20%) said it posted a net loss in the fourth quarter ended December 31 of €1.9 billion compared with a loss of €2.1 billion a year earlier, for a total loss in 2016 of €1.4 billion compared to a shortfall of €6.8 billion in 2015.