MILAN (Thomson Financial) - Shares were slightly higher midday, with Pirelli still in the spotlight as the closing of the deal to sell its Telecom Italia stake draws closer and Fastweb continuing to suffer from the downgrade by JP Morgan to 'underweight' from 'neutral'.
At 12.26 pm the Mibtel index was 0.29 pct higher at 31,294, while the S&P/Mib index was up 0.30 pct at 40,024 on volumes worth some 2.407 bln eur.
'Today focus is on technical expiries and market players are adjusting their positions,' one dealer said.
Leading the market higher was Banco Popolare, up 2.63 pct at 16.56, with dealers attributing the strength to a recovery after recent weakness. The share today is still some 25 pct lower than the price it started at on July 2, when the merger between Banca Popolare Italiana and Banca Popolare Verona e Novara made their merger official.
Banca Italease, in which Banco Popolare has a stake of some 30 pct, was however down 2.72 pct at 13.14 as Fondiaria-SAI is seeking a mediation after the leasing and factoring company called off plans to form a bankassurance partnership. Fondiaria was down 0.43 pct at 32.17.
Banca Italease posted a first half loss of 478.8 mln eur, primarily due to a loss of some 687 mln eur on derivatives trading.
Elsewhere in the banking sector, UniCredit added 0.50 pct at 5.83, with dealers saying that ABN-Amro earlier placed some 250 mln shares, or about 1.9 pct of share capital. ABN was a shareholder of Capitalia, which as of Oct 1 has become part of the UniCredit group.
Pirelli continued to shine, gaining 2.02 pct at 0.8685, with dealers saying the stock is facing an important resistance level at 0.87, which if breached could bring an acceleration of gains.
The stock is being boosted by hopes it will cash in its 3.3 bln eur in proceeds from the sale of its stake in Telecom Italia to the Telco consortium.
According to some dealers, the group could decide to pay an extraordinary dividend with the cash.
Telecom Italia added 0.45 pct at 2.1125, with dealers saying that the closing of the deal would mark the start of a new era for the group with a possible new business plan.
Oil-related stocks were generally higher, boosted by oil prices which were at record highs.
Tenaris added 1.92 pct at 18.30, while Eni rose 0.35 pct at 26.13 and Saipem rose 0.49 pct at 30.56.
Snam Rete Gas was down 0.56 pct at 4.5425. The group will pay an interim payment on Monday, as will Eni and Fastweb.
Fiat was up 1.50 pct at 22.94, ahead of the release of third quarter results next Wednesday, which should show strength at Fiat's light truck unit Iveco and agricultural machinery unit CNH. Analysts expect the group to up its full year trading profit target.
On the downside, Fastweb fell 2.35 pct at 40.29 as JP Morgan cut the stock to 'underweight' from 'neutral' following concerns about its market share growth potential after losing out to Vodafone on the purchase of Tele2 Italia.
The broker reduced the target price from 41 eur to 30 eur.
Prysmian was down 2.57 pct at 19.48. Some dealers noted that the end of the lock-up period in which Goldman Sachs could not sell the shares expires at the end of the month, putting some downward pressure on the stock. yael.schrage@thomson.com ysc/cmr COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
© 2007 AFX News
