FRANKFURT (AFX) - Share prices were lower in midday trade on expectations of a lower opening on Wall Street and pulled down by a decline of more than 5 pct in Deutsche Post shares, dealers said.
At 1.07 pm, the DAX was 8.09 points or 0.12 pct lower at 6,645.42 after trading between 6,640.82 and 6,685.45 during the first half of the day.
The MDAX was 1.24 points or 0.01 pct to 9,815.00, while the TecDAX retreated 0.97 points or 0.12 pct to 821.54.
DAX futures had lost 23.50 points or 0.36 pct to 6,548.00 and bund futures had gained 0.02 points or 0.02 pct to 116.15.
The euro traded at 1.3287 usd compared with 1.3279 in mid-morning London trade.
'Losses in Deutsche Post are pulling the market down slightly, while moderate gains in Adidas shares have not been able to lift the DAX,' said a Frankfurt-based trader.
Aside from trade in these two stocks, the market has been relatively quiet as investors are bracing for a decision from the US Fed over interest rates tomorrow.
Deutsche Post had dropped 1.22 eur or 5.25 pct to 22.00, leading blue chip stocks lower after the outlook it gave for next year came in lower than expected and left analysts talking of the postal carrier's apparently more cautious stance, dealers said.
'The outlook seems quite cautious,' said a broker from a major US brokerage.
'Deutsche Post sees an EBIT of at least 3.6 bln eur in 2007, while most analysts have penciled in around 3.9 bln eur compared with last year's EBIT of of 3.87 bln eur,' he said.
Infineon had lost 0.10 eur or 0.88 pct to 11.27. A broker note from Deutsche Bank said it expects global semiconductor sales to drop by 1.4 pct in 2007 compared to the previous year. Market analysts had previously been expecting a rise of 3.6 pct.
Munich Re lost 0.66 eur or 0.57 pct to 114.68. The world's second-largest reinsurer by revenues said in its annual report that its US unit Munich Reinsurance America posted a 2006 full-year net loss of 1.035 bln usd due to high asbestos claims and a negative tax effect.
The unit, which was called American Re when the German reinsurer acquired it in 1996, has had to be refinanced on several occasions.
In 2005, Munich Re America posted a full year net loss of 1.526 bln usd.
Peer Allianz was down 0.08 eur or 0.17 pct at 46.93.
Bucking today's trend, Adidas gained 0.65 eur or 1.72 pct at 38.50 as traders talked of renewed speculation the US competitor Nike Inc might launch a takeover bid.
An Adidas spokeswoman declined to comment, saying the company does not comment on market speculation as a matter of principle.
Separate sources said that there were rumours of a large-scale purchase of Adidas shares, perhaps through the Haniel family, Metro's major shareholder.
MAN shares had added 1.26 eur or 1.50 pct at 85.42, after it said that its unit MAN Nutzfahrzeuge AG expects full-year 2007 unit sales and revenues to increase 10 pct compared with 2006.
Volkswagen had climbed 1.09 eur or 1.04 pct to 105.75, buoyed by price target upgrades from Morgan Stanley and Lehman Brothers.
In the by far more bullish of the two notes, Morgan Stanley said it was lifting its target price by 26 pct to 135 eur per share and maintaining its 'overweight' stance due to valuation grounds following VW''s strong fourth-quarter results.
'We can account for VW's current share price just with our standalone valuation of the Audi AG business plus market values of the Scania and MAN equity stake,' the brokerage said.
'Our revised VW sum-of-parts model (also based conservative assumptions) comes to 181 eur per share, almost 75 pct above the current share price.'
Gea Group had risen 0.47 eur or 2.65 pct at 18.19, leading a largely flat MDAX.
Puma followed closely behind, climbing 6.78 eur or 2.54 pct to 273.61, as it, too, was pulled into the takeover speculation surrounding Nike and Adidas.
At the other end of the MDAX, Suedzuecker had fallen 1.16 eur or 7.82 pct to 13.68 after the sugar giant slashed its 2006/07 net profit forecast after suffering a 500 mln eur writedown on its French sugar business.
Lanxess had dropped 1.08 eur or 2.82 pct at 37.28, after the chemicals company announced fourth-quarter figures that came in slightly below expectations but with a moderate 2007 outlook expected to limit losses, dealers said.
A Frankfurt-based dealer said the numbers were slightly negative, but were not a huge surprise.
'I expect the shares to show moderate pricing pressure, but largely on technical grounds and not so much because of the results,' he said.
Another trader said the company's moderate outlook for 2007 -- given after Lanxess said it has started the year very well -- should ease stock price pressure.
On the TecDAX, Epcos fell the fastest, down 0.16 eur or 1.23 pct at 12.81, while Q-Cells added 0.90 eur or 1.99 pct to 46.08 at the other end. Tyler.Sitte@afxnews.com ts/vs/jsa COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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