Italy's MPS to rejoin Milan's blue-chip index from March 20 - sources

ROME (Reuters) - Banca Monte dei Paschi di Siena (MPS) is set to rejoin the FTSE MIB blue-chip index on the Milan stock exchange after six years of absence, two market sources told Reuters on Monday.

The return to Borsa Italiana's main index, expected on March 20, is another sign of recovery for the bank, which went through a state bailout and de-facto nationalisation in 2017.

MPS is currently in the FTSE MID Cap index and left the blue-chip index in March 2017. At 1536 GMT, its stock was up by more than 3.6%, outperforming Italy's bank sub-index.

MPS shares have gained more than 40% since the start of the year and the Tuscan lender now has a market capitalisation of around 3.4 billion euros ($36.04 billion).

One trader said MPS' stock has benefited from very high liquidity following November's 2.5-billion-euro new share issue, making it eligible for blue-chip status.

At the same time, Italian cement maker Buzzi Unicem is "very likely" to be downgraded from the blue-chip to the FTSE MID Cap index, the trader said.

($1 = 0.9433 euros)

(Reporting by Giancarlo Navach, writing by Alvise Armellini, editing by Cristina Carlevaro and Sharon Singleton)