Indexes posted modest gains at Piazza Affari in what proved to be a relatively quiet session with few notable catalysts.

Investors are awaiting the opening of Wall Street, which was closed yesterday for George Washington's Birthday, while in China, markets remain shut until February 23 for Lunar New Year celebrations.

On the U.S. macroeconomic front, the week's most anticipated data—the core PCE inflation indicator and the GDP estimate—are both scheduled for Friday. Recent updates on employment and prices have strengthened expectations for further rate cuts by the Federal Reserve. Futures indicate an 80% probability that the central bank will lower the cost of borrowing by 25 basis points in June, and are pricing in 62 basis points of easing for the entire year.

Around 9:45 a.m., the FTSE MIB was up 0.28%.

Banks remained upbeat, with UNICREDIT rising 0.86% and INTESA SANPAOLO up 0.88%. MPS advanced 0.74%, while its subsidiary MEDIOBANCA climbed 1.3%.

The main talking point of the day centers on reports from Il Corriere della Sera suggesting that ERG, up 3.5%, is considering extraordinary operations that could lead to a shareholding reorganization. Among the interested parties is A2A (+0.5%). The renewable energy group, controlled by the Garrone family, declined to comment. According to broker Equita, "The possibility of an industrial alliance has been circulating for some time, and should it materialize, in our view, it would be a positive development for the stock."

More broadly, utility stocks are rebounding today after several negative sessions, which were weighed down by rumors surrounding the government's draft energy decree. The measure is expected to penalize companies producing energy from renewable and hydroelectric sources. In the sector, IREN is the top performer, gaining 1.3%, followed by ENEL at +0.8%.

The defense sector pulled back, with LEONARDO down 1.85% and FINCANTIERI falling 2.8%.

PRYSMIAN also declined, slipping 2.1% after Berenberg downgraded its rating from 'buy' to 'hold'.

BFF BANK continued to face heavy selling, dropping 9% after yesterday's sharp decline, following the launch of an investigation by the Milan Prosecutor's Office into the bank on suspicion of accounting fraud.

(Giancarlo Navach, editing Stefano Bernabei)