Off Best Levels But Underpinned By Italian Banks & Energy Names

European equity benchmarks operate shy of best levels but remain comfortably above flat on the day.

• The FTSE MIB remains the regional outperformer (+1.4%) after yesterday evening’s Italian ‘clarification’ surrounding the windfall tax that will be applied on the country’s banking sector.
• The benchmark Euro STOXX 50 index is 0.8% firmer on the session, while the futures equivalent is around 35 points better off.
• All major sectors trade higher, with energy leading owing to gains in related commodity prices.
• Technically, a bearish threat in STOXX 50 futures remains present following last week’s sharp sell-off from 4,513.00. Yesterday’s move lower reinforces the current condition and price remains below both the 20- and 50-day EMAs. Furthermore, key support at 4,331.00, the Jul 26 low, has been cleared. This further strengthens current conditions and opens 4,220.00, the Jul 7 low and a reversal trigger. Initial firm resistance is 4,424.00, Aug 2 high.