Piazza Affari moves sharply higher, recovering yesterday's losses, in line with other European markets. Risk appetite returns among investors after statements by Fed Chairman Jerome Powell cementing the prospect of a U.S. rate cut.

Further insights on the next Fed moves could come in the evening from the release of the June Fomc minutes.

Also supporting investor mood is a relative narrowing of the France/Germany government bond spread, although the political situation in Paris remains a major indicator for the market just days before the second round of elections.

Investors are also looking ahead to the upcoming vote in Britain.

Around 12:30 p.m., the Ftse Mib is up 1.35 percent. Trading around 890 million, rarefied in view of the U.S. Fourth of July holiday with markets closing.

Stocks in focus today

In the banking sector, Mps is running, up about 6 percent with investors returning to reason about the Treasury's next moves on the remaining 26.7 percent stake it holds in the Sienese bank after the lock-up expires. Also very tonic was Bper (+5.2%) after Unipol signed a 'share swap' on 4.77% of the capital, rising to 24.62% of the Emilian bank.

Money a bit across the board with UniCredit at +2.1% and Intesa at +1.4%.

Leonardo also up 2.32%. According to German newspaper Handelsblatt, which cites industry sources, the Italian government is planning to buy Panther tanks and Lynx armored fighting vehicles from German group Rheinmetall for about 20 billion euros over 15 years.

Weak Eni (-0.4 percent). Morgan Stanley resumed coverage on the stock with an "Equal-weight" recommendation, citing the stock's attractive valuation while pointing out greater downside risks to the 2024 consensus. Saipem (-0.6%) also sold after its recent rally.

Cues on Diasorin advancing 3%, money also on Ferrari (+3.1%) and Stm at +2.8%.

(Giancarlo Navach, editing Francesca Piscioneri)