Euroshares open down after US losses Friday, Endesa down on new E.ON bid UPDATE

Euroshares open down after US losses Friday, Endesa down on new E.ON bid UPDATE

	Published : Mon, 05 Feb 2007 10:07 By : Agencies Print this Story

(Updating with full report)

LONDON (AFX) - Leading European exchanges made a lacklustre start to the week, weighed down by the DJIA's weakness on Friday and heavyweight Endesa's fall after the latest offer from E.ON, dealers said.

At 8.40 am, the STOXX 50 was down 1.34 points at 3818 and the STOXX 600 was down 0.23 points at 378.76.

Endea fell 2.41 pct in opening deals after E.ON raised its offer for Endesa by 12 pct to 38.75 eur, just below Friday's closing price of 39.04 eur per share.

Fortis Bank cut its stance on Endesa to 'hold' from 'buy' and Exane BNP Paribas cut its rating to 'neutral' from 'outperform'.

Nomura said the new price should improve the chance of success and bring relief to concerns about likely overspending and timing. It repeated its 'buy' stance on E.ON -- up 0.81 pct.

WestLB reiterated its 'buy' stance on E.ON and lifted its target to 122 eur from 117 eur.

And shares in Renault are down 1.69 pct again ahead of Thursday's full year profits update, as majority-owned Nissan dropped more than 9 pct this morning after the Japanese group's profit warning on Friday, dealers said.

UBS said the warning from Nissan was not a surprise as falling volumes had a negative effect on profits but said it is surprised that Renault insists it has reached its 2.5 pct margin target in 2006 and will stick to its 3 pct guidance for 2007.

The broker said it thinks it is unlikely the French group will issue a warning this week, although it is looking for further explanation on why the situation is different for Renault.

Faurecia dropped 7.03 pct as the car parts maker reported its full year net loss widened to 447.9 mln eur from 182.5 mln previously, while operating profit dropped to 69.2 mln eur from 267.2 mln a year earlier, reflecting the drop in business from the French automakers.

Shares in Atos Origin fell 1.67 pct after the French software group reported full year sales that were lower than even the recently reduced consensus.

'The numbers were in-line at best,' said a dealer at a major European broker, saying the full year operating margin was below consensus despite recent downgrades.

The guidance was also disappointing, he said, suggesting there will be further downgrades to the bottom line consensus.

But he said takeover hopes will limit today's falls.

Shares in Infineon were lower in early morning trade after Dresdner Kleinwort downgraded its stance on the German computer chip maker to are duce' from 'hold' while maintaining its price target of 9.50 eur per share.

Shares in Credit Suisse - down 1.13 pct were downgraded to 'hold' from 'buy' by ING.

Adidas was up 1.93 pct after Credit Suisse upgraded its stance on the sports equipment manufacturer to 'outperform' from 'neutral' pegged its target price at 43.60 eur per share, d

Shares in Volvo -- up 1.75 pct -- have been upgraded to 'buy' from 'hold' by Deutsche Bank.

Heavyweight oil groups were mostly higher as crude prices rose to their highest levels in four weeks in Asian trading as cold winter weather continued across much of the US.

ENI added 0.45 pct. Total added 0.38 pct.

BP added 0.84 pct as Goldman Sachs upgraded the shares to 'buy' from 'neutral' ahead of the group's strategy update tomorrow.

But Royal Dutch Shell slipped 0.8 pct as Deutsche Bank was the latest broker to cut its rating on the Anglo-Dutch group, to 'hold' from 'buy'.

deborah.hyde@afxnews.com

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