The following factors could affect Italian markets on Wednesday.
Reuters has not verified the newspaper reports, and cannot vouch for their accuracy. New items are marked with (*).
Italy's cabinet meets to approve 1.6 billion euros ($2.18 billion) in cuts needed to keep the 2013 deficit below a 3 percent of output ceiling set by European rules.
The cabinet will also approve special defence and telecommunications powers, including that over Telecom Italia's fixed line network.
The Italian Treasury said on Tuesday it would offer up to 6 billion euros of fixed-rate bonds (BTPs) and floating rate certificates linking to the Euribor rate (CCTEU) at its regular mid-month auction on Oct. 11. * Italy will price on Wednesday its first-ever seven-year bond, due in May 2021. Initial price thoughts on Tuesday pointed to a spread of 10-12 basis points over the March 2021 BTP bond.
Moody's cut the phone company's credit rating to Ba1 from Baa3. * Telecom said in a statement late on Tuesday that its debt refinancing contracts did not contain any clauses that envisaged a capital repayment step-up or payment acceleration linked to moves in the rating. * BlackRock Managing Director Mike Trudel told Il Sole 24 Ore that a "very attractive valuation" was behind the decision to raise the stake in Telecom Italia to 5.13 percent. He added energy and industrials were the most promising sectors for Italian stocks, as well as some banks.
Italian insurer Generali said on Tuesday it sold its indirect stake in Venice airport operator Save for the equivalent of 13 euros per share, as part of a plan to exit from non-core businesses.
The loss-making airline said it called a board meeting for Thursday Oct. 10 and was confident that the government would "define necessary measures" and creditors would provide the support it needs to "re-balance its finances." * The government is preparing to underwrite a bond to be issued by the airline to help it bridge its liquidity crisis, La Stampa said.
Other papers added that state railway group Ferrovie dello Stato and state holding company Fintecna could take a stake in the carrier to strengthen its negotiating power before a possible tie-up with Air France-KLM. The public entities could subscribe for up to half of a 300 million capital increase, they added.
The online fashion retailer has held talks with Switzerland's Richemont for a possible merger with Net-a-porter to create the world's No.1 luxury and fashion e-commerce website, Il Sole 24 Ore reports, adding that talks have stalled due to disagreements on the shape of the operation.
A shortlist of seven investors interested in taking a minority stake in the fashion house includes: a joint-venture between the Italian Strategic Fund and the Qatar wealth-fund, private equity funds Permira, Clessidra and possibly Investindustrial, Axa Private Equity and U.S. group Blackstone , Il Sole 24 Ore reported citing rumours.
The chief executive of one of Italy's largest banks was quoted as saying in the Financial Times he expected to see mergers among mid-sized lenders in the first half of 2014.
LAMPEDUSA- European Commission President Jose Manuel Barroso, EU Commissioner for Home Affairs Cecilia Malmstrom, Italian Prime Minister Enrico Letta and Interior Minister Angelino Alfano to visit the isle; followed by news conference at 0930 GMT.
ROME - PDL ministers hold a press conference at 1200 GMT.
ROME- OECD report presentation on "2013 International Migration Outlook" with Welfare Deputy Minister Cecilia Guerra (0830 GMT).
ROME- Italian administrative court 'TAR del Lazio' decides on final price investment vehicle Lauro 61 must pay in a buyout bid for Camfin shares.