(Alliance News) - On Wednesday, European stock markets--according to the futures market--indicate a bearish opening, following Asian markets that are tinged red following Fitch's rating downgrade regarding the world's largest economy, the US.

The Nikkei has left 2.3 percent on the parterre, the Hang Seng is similarly giving up 2.3 percent, while the Shanghai Composite marks minus 1.0 percent.

This downgraded the U.S. credit rating by one notch, citing a growing federal debt burden and an "erosion of governance" that has manifested itself in standoffs over debt limits.

The decision to downgrade the U.S. to 'AA+' from 'AAA' sparked the ire of the White House, with press secretary, Karine Jean-Pierre, saying the move "defies reality." Treasury Secretary Janet Yellen, said in a separate memo that she "strongly" disagreed with Fitch, calling the change "arbitrary and based on outdated data."

It is the first such downgrade by a major rating firm in more than a decade. A debt ceiling impasse in 2011 saw S&P lower Washington's 'AAA' rating at the time, sparking bipartisan outrage.

Corporate news before the bell rang included Iveco Group, which released its first-half numbers on sharp growth. The company reported that it closed the period with a net profit of EUR160 million compared with a net profit of EUR21 million in the same period last year. Pre-tax profit rose to EUR245 million from EUR72 million while operating profit increased to EUR245 million from EUR134 million.

Revenues grew to EUR7.58 billion from EUR6.42 billion a year earlier, with cost of sales rising to EUR6.30 billion from EUR5.55 billion and selling, general and administrative expenses up to EUR483 million from EUR443 million.

Thus, the FTSE Mib reports a red 260.00 points after closing down 1.0 percent at 29,356.16 last night.

In Europe, London's FTSE 100 marks a decline of 57.50 points, Paris' CAC 40 gives up 82.00 points, and Frankfurt's DAX 40 is stepping back 187.00 points.

Among the smaller listings last night, the Mid-Cap closed down 0.8 percent to 42,544.75, the Small-Cap in the red 0.7 percent to 27,007.03, Italy Growth down 0.4 percent to 9,042.76.

On the main index of Piazza Affari last night, Telecom Italia was among the best - in the green by 1.5 percent - after the news that the government is probably ready to make a move with the Treasury's direct co-involvement together with KKR and F2i on the network issue.

Driving the action in Milan is first and foremost the news that TIM Brasil, the group's real golden goose, posted better-than-expected results. In the second quarter, revenues were up 9.2 percent on the previous year and net income for the period rose to EUR121 million from EUR54 million.

"According to rumors published today by la Repubblica, which have not been denied, the U.S. fund KKR is working on an advance of its offer with respect to the September 30 deadline granted by Telecom's board of directors. Within a month, the US fund's final proposal could be ready. On the money, we would not deviate much from the figures anticipated in recent months, namely EUR21 or EUR22 billion," Francesco Bonazzi, columnist for Alliance News, wrote in his Affari in Piazza.

"KKR wants to have a majority stake in NetCo and would be joined by the Treasury, with a 15 percent share, and the pair formed by F2i and CDP, with 20 percent. The Ministry at Via XX Settembre would enter directly to limit the reach of CDP, which has 10 percent of Telecom and controls competitor Open Fiber. The fear is that European antitrust will raise exceptions to CDP's role."

In the red was FinecoBank, which left 1.6 percent on the parterre despite record first-half data. The company reported that net income amounted to EUR308.9 million, up 39 percent from EUR222.5 million reported in the same period last year. Revenues stood at EUR600.7 million, up 29% from EUR464.3 million in the first half of 2022.

The banks all suffered. The board of Banca Mediolanum -- in the red by 3.8 percent -- on Tuesday approved the consolidated half-year financial report as of June 30, reporting a net profit of EUR363.3 million, up 51 percent from the value recorded in the first half of 2022 of EUR241.1 million. Net interest income amounted to EUR347.3 million from EUR167.5 million in the same period of the previous year, thus up 107% due to the rapid increase in interest rates and the weight of the variable component in the composition of the loan portfolio and securities held by Treasury.

On the Mid-Cap, Reply gave up 2.7 percent, after approving Friday results as of June 30 reporting a pre-tax profit of EUR113.5 million up from EUR108.7 million in the first half of FY2022. Revenues of EUR1.04 billion registered a 17 percent growth from EUR889.7 million in the first half of the previous year.

Also in the red was Safilo Group, which gave up 2.7 percent. The company announced Monday the renewal of its licensing agreement with Brazilian group Alpargatas for the design, production and distribution of havaianas-branded prescription frames and sunglasses until Dec. 31, 2028.

On the upside, among others, was Brembo, which rose 2.7 percent after announcing Monday that on Tuesday, August 1, the share buyback program approved earlier by the shareholders' meeting, for a maximum of EUR144.0 million and a maximum of 8.0 million ordinary shares, will be launched. The program has a duration of 18 months and will therefore end by October 20, 2024.

Salcef Group, down 1.1 percent, announced Tuesday that it had completed the closing for the acquisition of the entire share capital of Colmar Technik. The closing took place following the fulfillment of the conditions precedent stipulated in the preliminary agreement and the successful conclusion of the due diligence process.

The board of directors of Arnoldo Mondadori Editore -- in the red by 0.2 percent -- reviewed and approved Tuesday the half-year financial report as of June 30, reporting a profit of EUR12.2 million, up from EUR2.8 million in the same period of 2022. Consolidated profit before tax is EUR12.3 million, an improvement from EUR500,000 in the first half of 2022.

On the Small-Cap segment, RCS MediaGroup -- down 1.4 percent -- reported Monday that it ended the first half of the year with a net profit of EUR30.3 million, up from EUR24.2 million in the same period last year.

The net profit rose despite revenues falling to EUR439.2 million from EUR445.7 million, with first-half advertising revenues amounting to EUR179.4 million compared to EUR175.1 million in the first half of 2022. Total advertising revenues in online media stood at EUR67.7 million, accounting for about 38 percent of total advertising revenues.

Esprinet sold 1.9 percent after announcing Tuesday that it had acquired, through its subsidiary V-Valley Advanced Solutions España, 100 percent of the share capital of Lidera Network, a Spanish-registered company with a branch in Portugal that has been active since 1999 in the distribution of software solutions in the cybersecurity field. The agreed consideration, amounting to EUR5.6 million and subject to actionable adjustment mechanisms within one year, was paid in full in cash.

Among SMEs, SolidWorld Group - in the green by 2.7 percent - announced on Tuesday that it had finalized, through its subsidiary SolidFactory Srl, the transfer of a technology business unit from Formula E Srl, of the Vismunda Srl group, a world leader in automation for equipment dedicated to the renewable energy sector.

The economic value of the branch contributed to SolidFactory is EUR970,000. Also included in the contribution is Formula E's current customer portfolio, which includes orders worth more than EUR2.6 million, which will run out to about EUR1 million in 2023 and EUR1.6 million in June 2024, while the value of production in 2022 stood at about EUR3 million.

Riba Mundo in its first days on the Stock Exchange took the top up 22 percent to EUR31.50 per share. The company started trading after a EUR5.3 million IPO, which would rise to EUR5.5 million if the over-allotment is exercised in full. The free float is 13 percent and the market capitalization is EUR40 million.

In New York on European night, the Dow closed up 0.2 percent, the Nasdaq in the red 0.4 percent, and the S&P 500 advanced 0.3 percent.

Among currencies, the euro changed hands at USD1.0982 versus USD1.0963 in Tuesday's European stock close while the pound was instead worth USD1.2762 from USD1.2760 last night.

Among commodities, Brent crude is worth USD85.71 per barrel versus USD84.92 per barrel at yesterday's close. Gold, meanwhile, trades at USD1,948.41 an ounce from USD1,980.25 an ounce last night.

On Wednesday's economic calendar, the US mortgage rate is due at 1300 CEST while at 1630 CEST it is the turn of crude oil stocks data.

Among the results expected today are those of Banco BPM, BPER Banca, Ferrari, Technogym and Telecom Italia, among others.

By Maurizio Carta, Alliance News reporter

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