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Telecom Italia down 2 percent, chairman says cap hike needed

MILAN (Reuters) - Shares in Telecom Italia (MIL:TIT) were down more than 2 percent in early trade on Wednesday after Chairman Franco Bernabe said the Italian phone group may launch a capital increase to avoid a credit downgrade of its debt.

At 0707 GMT, the stock was down 1.8 percent at 0.5885 euros, underperforming a 0.4 percent fall in Milan's FTSE MIB blue-chip index (.FTMIB).

(Reporting by Agnieszka Flak, editing by Jennifer Clark)