Swisscom said it is in advanced talks to buy Vodafone Group’s Italy business for 8 billion euros ($8.68 billion), weeks after the U.K. group turned down a bid from Xavier Niel’s Iliad Group. The Swiss telecommunications company said Wednesday that it plans to merge Vodafone Italia with its Italian subsidiary Fastweb, potentially shaking up one of Europe’s largest telecoms markets. Vodafone separately confirmed the talks. The company said that after speaking with several parties to explore market consolidation in Italy, it believes a deal with Swisscom delivers the best combination of value creation, upfront cash proceeds and transaction certainty for its shareholders. The talks signal growing appetite for mergers and acquisitions among European telecommunications companies after Orange and MasMovil last week received conditional clearance from European Union antitrust authorities for their EUR18.6 billion merger in Spain. Iliad-backed Frey earlier this week agreed to buy a stake in Swedish telecom company Tele2 from investment company Kinnevik. For Vodafone, a potential sale would continue a yearslong effort to streamline its portfolio. Last year, the company struck a deal to sell its Spanish business to Zegona Communications for at least EUR4.1 billion.

After staying positive till a couple of hours past noon on Wednesday, Swiss stocks turned slightly weak and spent the rest of the session in negative territory. The benchmark SMI, which advanced to 11,498.95 about an hour after the opening bell, ended the day's session with a loss of 26.07 points or 0.23% at 11,414.38. Sonova ended down 3.5%. Nestle ended lower by 1.74%, while Geberit, Swisscom and Logitech International lost 1.25 to 1.4%. Sika ended 1.1% down. Givaudan, Nvartis and Roche Holding recorded moderate losses. Alcon climbed 5.3%. Kuehne & Nagel gained about 2.1%, while Zurich Insurance Group and Richemont both ended higher by about 1.15%. ABB and Swiss Re gained 0.4% and 0.76%, respectively. In the Mid Price index, Meyer Burger Tech dropped more than 8%. SIG Combibloc ended down 3.8% and ams OSRAM AG closed down 3.1%. Avolta, Tecan Group, PSP Swiss Property, Straumann Holding, Ems Chemie Holding and Clariant lost 1.5 to 2.1%. Galenica Sante, Sandoz and Swiss Prime Site also ended notably lower. Lindt & Spruengli, Schindler Ps and Schindler Holding lost 1.3 to 1.7%. A report from UBS & CFA Society showed the Swiss investors' sentiment index surged by 29.7 points from the previous month to 10.2 in February 2024, marking the highest reading in nearly 2-1/2 years and pointing to renewed optimism around the Swiss economy due in part to a recovery in exports.

Europe
European stocks ended mixed on Wednesday with investors reacting to quarterly earnings updates and making largely cautious moves ahead of key U.S., eurozone and Chinese economic data due this week. Monthly survey data from the European Commission showed Eurozone economic confidence weakened unexpectedly in February. The economic sentiment index fell to 95.4 from 96.1 in the previous month. The score was forecast to rise to 96.7. At -9.5, the industrial confidence indicator hit the lowest in six months. Similarly, the services sentiment index dropped to 6.0 from 8.4 a month ago. By contrast, the consumer confidence index improved to -15.5, as initially estimated, from -16.1 in January. The pan European Stoxx 600 ended down 0.35%. The U.K.'s FTSE 100 dropped 0.76%, while Germany's DAX and France's CAC 40 ended higher by 0.25% and 0.08%, respectively. Among other markets in Europe, Austria, Denmark, Greece, Iceland, Netherlands, Poland, Portugal, Spain and Turkiye closed weak. Ireland, Norway, Russia and Sweden ended higher, while Belgium and Finland closed flat. In the UK market, Rolls-Royce Holdings advanced more than 3%. St James's Place tanked more than 21%. The stock fell after the company reported an annual loss primarily due to setting aside 426 million pounds for potential client refunds related to ongoing complaints. Reckitt Benckiser plunged 12% after fourth quarter like-for-like net sales came in below expectations.

United States
Stocks regained ground after an early move to the downside on Wednesday but still ended the day mostly lower. The major averages all finished the day in negative territory following the mixed performance on Tuesday, with the Dow closing lower for the third consecutive session. After falling by more than 200 points in early trading, the Dow ended the day down just 23.39 points or 0.1 percent at 38,949.02. The S&P 500 dipped 8.42 points or 0.2 percent to 5,069.76, while the Nasdaq slid 87.56 points or 0.6 percent at 15,947.74. The early weakness on Wall Street came as some traders looked to cash in on the recent strength in the markets ahead of the release of closely watched readings on consumer price inflation on Thursday. The inflation readings, which are said to be preferred by the Federal Reserve, are expected to show the annual rate of consumer price growth slowed to 2.4 percent in January from 2.6 percent in December. The annual rate of growth by core consumer prices, which exclude food and energy prices, is also expected to dip to 2.8 percent in January from 2.9 percent in December. Notable weakness was also visible among semiconductor stocks, as reflected by the 1.1 percent loss posted by the Philadelphia Semiconductor Index.. Salesforce Inc.’s stock initially slipped 4% in after-hours trading Wednesday after the company racked up revenue and earnings that topped analysts’ estimates.

Asia
Stock markets in East Asia and Australia were mixed on Thursday ahead of the eagerly awaited price data from the USA in the afternoon. In Tokyo, the Nikkei-225 fell again slightly by 0.1 per cent to 39,174 points after reaching an all-time high this week. In China, where after a choppy start to the trading day there is now a noticeable upward trend, investors are betting on further new government stimuli for the economy.

Bonds
In the U .S. bond market, treasuries regained ground after moving lower over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell 4.1 basis points to 4.274 percent.

Analysis
UBS lowers the Softwareone target to CHF 18.85 (20) – Buy
UBS raises the DKSH target to CHF 75 (70) – Buy
Barclays lowers the Kering target to EUR 413 (435) – Equalweight

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