STOCKS NEWS EUROPE-Mediaset leads Milan gainers as HSBC ups target

Shares in Mediaset (Other OTC: MDIUY - news) rise more than 4 percent to their highest level since May 2011, with traders citing a target price upgrade by HSBC, and with the gains further fuelled by the break of a key technical resistance level at 4 euros.

HSBC raised its price target on Italy's biggest commercial television broadcaster to 3.3 euros from 2.6 euros, citing higher profitability of Mediaset's domestic operations following stronger cost cuts and increased net ad revenue growth estimates for Mediaset Espana (Munich: RWW.MU - news) , which is 40 percent owned by the Italian firm.

The upgrade helps the volatile stock break above 4 euros per share - a level that had capped its gains in 2013. Volumes around half way through the session top 137 percent of their 90-day daily average, adding conviction to the move.

"The volumes tell us that the stock will continue rising," a Milan-based trader says, adding that the stock was very volatile.

Another trader adds that Mediaset's announcement last month that it would merge its Italian and Spanish pay-TV businesses, paving the way for a possible stake sale, also continues lending support to the shares.

The stock is up 4.39 percent at 4.05 euros, making it the best performer in Milan's FTSE MIB blue-chip index.

Reuters messaging rm://claudia.cristoferi.thomsonreuters.com@reuters.net

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