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POLL-Italy's FTSE MIB to rise in 2011, led by banks

Published 03/24/2011, 10:16 AM
Updated 03/24/2011, 10:20 AM

* FTSE MIB to rise through the year-median forecast

* Index seen at 23,240 by end-Dec (22,000 in Dec poll)

* Banks to outperform, industrials underperform

MILAN, March 24 (Reuters) - Italy's blue-chip stock index will make more gains in 2011 than expected three months ago, buoyed by an easing of euro zone sovereign debt worries, the economic recovery and M&A, a Reuters poll showed on Thursday.

The FTSE MIB is seen rising 1.4 percent to 22,000 points by mid-2011 and by 7 percent to 23,240 by the end of 2011 from Wednesday's close of 21,698.38, according to the median of 22 market strategists polled over the last week.

This would mean the 40-share benchmark index will end this year near its 2011 high of 23,274 reached in mid-February, and still off last year's high of 24,059.

The index's expected net gains this year of over 15 percent make it one of the best performing rich-world bourses, after losses of over 13 percent in 2010. Forecasts for the end of 2011 ranged from 18,000 to 26,000.

"For the main world share indexes, and so also the Italian one, the main market mover for the next months should be the price of raw materials, firstly oil then metal and food products," Fida's Giuseppe Reale said.

New solutions proposed by European Union leaders for European debt problems will support peripheral euro zone and Mediterranean stock markets, such as Italy and France in the short term, Nuovi Investimenti's Davide Manenti said.

Mergers and acquisitions are seen as another driver, Schroders investment director Mario Spreafico said.

France's LVMH has bid this year for Italian jeweller Bulgari and France's Lactalis has bought 29 percent of dairy firm Parmalat.

Strategists cited a number of risks to their forecasts, such as new euro zone problems, bank stress tests, the Japan earthquake impact, and North African turmoil. Italy's oil major Eni is active in North Africa.

On sectors, banks, renewable energy, oil and luxury stocks are mostly seen outperforming, while industrials will underperform the index, respondents said.

"The pick-up in inflation could bring some benefits to the financial sector," Anima manager Emilia Colombo said.

(Reporting by Sabina Suzzi and Nigel Tutt, additional polling by the Bangalore Polling Unit; Editing by Jon Loades-Carter)

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