Indices in Piazza Affari are moving sharply higher, marking new all-time highs, fueled by hopes of a de-escalation between Iran and the U.S. following comments from Donald Trump suggesting a deal could be reached by the weekend.

However, Tehran has clarified that a final decision has not yet been made.

Buying interest is also evident across the rest of Europe, while U.S. index futures remain flat at the moment following yesterday's rally on Wall Street.

The banking sector continues to act as the primary engine for Milan, driven by ongoing consolidation rumors and, specifically, after the ECB raised the deposit facility rate to 2.25% in its first restrictive move in nearly three years. The door remains open, though far from certain, for another hike in ECB reference rates in July.

Expectations of a cooling of tensions in the Middle East are pushing Brent crude prices lower, with the benchmark settling below $90 per barrel.

As of 12:50 PM, the FTSE MIB is up 1.90%. During the session, the index of Piazza Affari's leading blue-chip stocks touched a new record high of 51,645 points. Trading volumes on the exchange stand at €2.2bn.

Today's featured stocks

** The banking index is climbing 3.6%, with gains for heavyweights INTESA SANPAOLO and UNICREDIT moving in tandem, up 3.6% and 4% respectively. Among the top performers, BANCA MPS is advancing 3.8%, reaching its highest level since July 2022, while its subsidiary MEDIOBANCA is up 4% at new record highs. Beyond consolidation talk, one trader noted that banks are highly sensitive to ECB rate trends due to the direct impact on net interest margins.

** STELLANTIS is seeing a decisive rally, up a substantial 6% in the wake of the broader European sector as investors return to cyclicals, stocks that are sensitive to economic performance.

** The decline in raw material costs is weighing on the oil sector, with ENI slipping 3.6% and oil service firms such as SAIPEM and TENARIS falling between 1% and 2%.

** The cement sector is seeing strong demand, rebounding on hopes for an end to conflicts and the subsequent prospects for post-war reconstruction. CEMENTIR is advancing 9.2%, BUZZI is up over 6%, and WEBUILD has gained 5.3%.

** Outside the main index, JUVENTUS shares remain well-bid today, rising 2.9%, while LAZIO is down 0.3% in volatile trading following the Rome-based club's denial of a sale of the company owned by Claudio Lotito.

** Finally, THE ITALIAN SEA GROUP is losing 5.4% after yesterday's rally of over 14% on rumors of interest from FERRETTI, which is up 2.2% and has denied that "any negotiations" are underway. According to Equita, "Ferretti's interest in the Italian Sea Group shipyards would be motivated more by production capacity needs than by a desire to develop the refitting sector, which is currently marginal for the group."

(Giancarlo Navach, editing Gianluca Semeraro)