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news) reinitiated the energy group with an 'overweight' stance.
At 12.08 pm, the PSI (PSCPE.OB - news) 20 index was down 257.24 points or 2.09 pct at 12,070.51. Equities opened slightly higher after Wall St closed positive overnight after a volatile session, but soon turned lower and extending losses throughout the morning. 'I believe that we are seeing a massive exit of foreign investors today from the Portuguese stock market, which is also associated to a reduction of exposure to shares at some domestic funds,' said a trader at a leading Portuguese bank. Traders said that some international investors are leaving due to a more cautious outlook for the Portuguese economy. Earlier this week, the Bank of Portugal has cut its 2008 GDP growth forecast to 2 pct from 2.2 pct previously, saying the cut reflects forecasts for decreased domestic consumption and exports. The banking sector was among the most penalised, among global credit crisis woes, with heavyweight BCP down 0.10 eur or 3.70 pct at 2.60, smaller peer BPI (Milan: BPI.MI - news) shedding 0.24 or 5.12 pct to 4.45 and BES down 0.64 or 4.62 pct at 13.22. Traders said BCP was outperforming banking peers because some investors are not willing to sell a significant number of shares ahead of the bank's Jan 15's EGM, which will elect a new executive board. Builders were also weak, with Mota Engil (Lisbon: EGL.LS - news) down 0.29 or 6.29 pct at 4.32, Teixeira Duarte down 0.14 or 8.54 pct at 1.50 and wood panel maker Sonae Industria (Lisbon: SONI.LS - news) shedding 0.32 or 6.18 pct to 4.86. Sonae SGPS (Lisbon: SNA.LS - news) was down 0.09 or 6.67 pct at 1.26 and telecom arm Sonaecom (Lisbon: SNC.LS - news) shed 0.09 or 3.08 pct to 2.83. Meanwhile, blue chip EDP gained 0.06 at 4.60, preventing further losses to the index, after Morgan Stanley reinitiated the energy group with an 'overweight' stance and a 5.20 eur per share target, praising the company's defensive profile and visibility. Heavyweight Portugal Telecom, down 0.05 at 9.35, also outperformed most PSI 20 shares, on news that Brazilian operator Oi is close to buy peer Brasil Telecom. Traders said the news is positive for PT as it widens the Portuguese company's option in Brazil if it leaves Vivo.
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