Italian Stock Market Rises on Trade Deal Optimism and Fed Expectations

FTSEMIB Records Significant Gains

The major Italian stock market index, the FTSEMIB, concluded trading on January 27, 2026, with a notable increase, closing up 1.09% at 45,440 points. This positive performance extended gains from the previous trading session, reflecting a buoyant mood among investors in Milan. The FTSEMIB is a key benchmark for the Italian equity markets, tracking the performance of the 40 most liquid and capitalized companies listed on the Borsa Italiana, and represents approximately 80% of the domestic market capitalization.

Key Drivers: Trade Agreement and Central Bank Anticipation

The upward movement in the Italian market was largely attributed to two significant factors. Firstly, investors reacted positively to the announcement of a new EU-India trade agreement, reached after nearly two decades of negotiations. This deal is expected to boost the outlook for European exports and global trade prospects. Secondly, market participants were keenly awaiting the US Federal Reserve's policy decision, with widespread expectations that interest rates would remain unchanged. The narrowing of the BTP-Bund spread also contributed to the positive sentiment, particularly supporting financial stocks.

Sectoral Performance Highlights

Several prominent Italian companies and sectors contributed significantly to the index's rise. Leading the gains were:

• Prysmian, which saw its shares climb by 2.81%.
• UniCredit, a major banking group, recorded an increase of 2.54%.
• Aerospace and defense company Leonardo SpA advanced by 2.16%.
• Other strong performers included Mediolanum (up 1.9%), Enel (up 1.5%), and STMicroelectronics (up 1.8%).

Conversely, some luxury stocks experienced a downturn, with Ferrari down 1.0%, Moncler off 1.2%, and Brunello Cucinelli slipping 0.7%. Campari also saw a decline of 2.9%.

Broader European Market Context

The positive trend in Italy was mirrored across other major European markets on January 27, 2026. The UK's FTSE 100 climbed 0.3%, France's CAC 40 rose 0.2%, and Germany's DAX also saw a 0.2% increase. Spain's IBEX 35 gained 0.3%. This synchronized upward movement suggests a broader regional optimism driven by similar economic and policy expectations.