MILAN (Thomson Financial) - Milan shares were marginally higher midday with gains in Eni and Telecom Italia offsetting weakness in financial stocks and Fiat, but dealers note there are few strong trading ideas and a high level of uncertainty in the market.
At 12.35 pm, the Mibtel index was 0.15 pct higher at 29,770 while the S&P/Mib was up 0.20 pct at 38,520 on volumes worth some 2.633 bln eur.
'There is very little desire to take new positions because there is too much uncertainty on the market,' said a dealer.
'From here to year end the market will go test the lows from August and it risks going below these levels, which would indicate that Italy has entered a bear market,' another dealer said.
The S&P/Mib index touched a low of 37,921 on Aug 16.
Eni was limiting the fall in the market by rising 2.55 pct at 24.16 eur as Deutsche Bank brought its target price to 30 eur from 29 eur while keeping its 'buy' stance.
In a report on European integrated oil, Deutsche Bank said 'with earnings momentum in the sector presently very strong and our revised oil price deck suggesting EPS some 20 pct higher in 2008/2009 than previously forecast, we strongly believe that current sector valuations fail to reflect the cash driven value inherent in the sector.'
Tenaris was also stronger, up 2.16 pct at 16.40 on the back of the rise in Paris of Vallourec that surged as rumours of a takeover bid resurfaced.
Snam Rete Gas added 1.02 pct at 4.4075, while Saipem slumped 1.69 pct at 27.92.
Telecom Italia added 1.70 pct at 2.1775 as its shareholders are still trying to to find an agreement on its new management.
The cement sector was mixed with Buzzi Unicem up 1.86 pct at 19.40 while Italcementi dropped 1.23 pct at 13.47 and Cementir added 0.20 pct at 6.595.
In the construction sector, Impregilo added 4.35 pct at 4.33 with analysts noting that the share is deeply undervalued but penalized by the general mood on small-cap shares which are not considered attractive in this market cycle, by the fact that it is a cyclical stock and by the economic risks in terms of growth of infrastructure in Italy and in Europe.
In the banking sector, Banco Popolare touched its lowest point since June 2005 as disappointment over third-quarter results and concern over its 31 pct stake in Banca Italease continues to weigh.
According to a dealer, a report from Merrill Lynch says that the bank could launch a 900 mln eur capital hike to strengthen its capital ratios should it not succeed in selling assets.
Banca Italease dropped 1.38 pct at 11.06.
UniCredit fell 0.73 pct at 5.575, Intesa Sanpaolo dipped 0.02 pct at 5.145 and Mediolanum shed 0.36 pct at 4.98.
Among insurers, Generali fell 0.64 pct at 31.15 ahead of the first meeting of its governance committee in which according to reports some members could ask for the appointment of an independent advisor to tackle the question of management structures at the group, which was recently attacked by UK activist hedge fund Algebris.
Fondiaria-SAI fell 0.46 pct at 30.46 while Unipol shed 1.92 pct at 2.4275.
Fiat fell 2.09 pct at 19.68. yael.schrage@thomson.com ysc/slj 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
