Friday January 11, 12:04 PM
Milan shares marginally lower mid-day led by oil, luxury sector; Seat PG shines
MILAN (Thomson Financial) - Milan shares see-sawed from positive to negative territory all morning and at midday were in the red with losses led by energy related stocks and the luxury sector while there was a rebound in Seat Pagine Gialle (Milan: PG.MI - news) , which since the start of the year lost some 15 pct of its value and in financial stocks, especially Alleanza (Milan: AL.MI - news) .
At 12.37 pm the Mibtel index was 0.19 pct lower at 27,944 while the S&P/Mib index shed 0.15 pct at 37,237 on volumes worth some 2.042 bln eur.
'The S&P/Mib is close to a very important support area of 37,000. It will be very important to see how the US markets behave and if they hold on to key levels today,' a dealer said noting that anyone still interested in investing in equity markets was betting on safe stocks in the pharmaceutical, food and utility sectors.
The leading losers were energy stocks with Tenaris (Milan: TEN.MI - news) down 3.10 pct at 13.18 eur and Saipem (Milan: SPM.MI - news) losing 2.60 pct at 24.77.
'There is general selling on those shares that look to be most expensive, especially the oil related stocks,' one dealer noted.
Eni (Milan: ENI.MI - news) shed 0.40 pct at 25.05.
According to Russian wire agency Interfax, Kazakhstan's Energy and Natural Resources Ministry is examining the possibility of severing the North Caspian project production-sharing agreement (PSA) with the international Agip KCO consortium led by Eni.
'The ministry, together with KazMunayGas, are examining the issue and are drafting the documents necessary to dissolve the North Caspian PSA with the Agip KCO consortium,' a source familiar with the talks told Interfax.
Eni would not comment on the report.
STMicro also continued to be weak after Credit Suisse downgraded the stock from 'outperform' to 'neutral' bringing the target price to 10.5 eur from 13.0 eur as it sees the stock as the least attractive in terms of risk-reward ratio.
Luxury sector stocks were also in the red on fears of a slowdown in the US economy and US consumption.
Bulgari (Milan: BUL.MI - news) shed 2.14 pct at 8.20.
Luxottica (Milan: LUX.MI - news) was off 1.55 pct at 18.00 despite its CEO telling daily Il Sole 24 Ore that the group will end 2007 with sales of nearly 5 bln eur and a net profit of 500 mln eur, confirming the company guidance.
On the upside, Seat Pagine Gialle added 4.30 pct at 0.2401 benefiting from ferment in the directory sector after rumours of an interest by Google (NASDAQ: GOOG - news) in the UK group Yell, dealers said.
Alleanza, the life insurance unit of Assicurazioni Generali (Milan: G.MI - news) , added 2.01 pct at 8.665 rebounding from recent four-year lows and after reports that it may sell its 50 pct stake in the Intesa Vita venture it has with Intesa Sanpaolo (Milan: ISP.MI - news) .
A report in weekly Il Mondo said that Banca Generali (Milan: BGN.MI - news) , Generali's banking unit, could buy Intesa Sanpaolo's asset management arm Banca Fideuram (Milan: BFI.MI - news) valuing it at 5 bln eur and paying for it with 3 bln in cash and the rest by selling the 50 pct stake in the venture, valued at 2 bln eur.
Both Generali and Intesa Sanpaolo said the report was groundless and analysts consider it unlikely as the price mentioned seems to be too high and the creation of such a group would create problems in terms of market dominance.
However, there was speculation on Alleanza that the sale of Intesa Vita could bring it to distribute an extraordinary dividend or that Generali could take advantage of the current differential between the two stocks to buy out minority shares.
Generali shares were down 0.48 pct at 31.25 while Banca Generali was up 1.36 pct at 6.10 and Intesa Sanpaolo added 0.48 pct at 5.225.
Fondiaria (Milan: FSA.MI - news) -SAI added 1.50 pct at 25.73. Earlier it confirmed that within the first months of this year Credit Agricole (Paris: FR0000045072 - news) 's Cariparma unit would exercise a call option on 50 pct of the Po Vita bancassurance venture that it does not already own.
Fondiaria has offset the loss of this deal, which had been expected for some time, with other bancassurance deals with Banca Popolare di Milano (Milan: PMI.MI - news) and Banco Popolare (Milan: BP.MI - news) .
Fiat (Milan: F.MI - news) added 1.81 pct at 16.50. According to some dealers, Merrill Lynch (NYSE: MER - news) resumed coverage of the stock with a 'buy' stance and a 21 eur price objective.
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