Milan shares close higher, led by Pirelli UPDATE

Milan shares close higher, led by Pirelli UPDATE

	Published : Fri, 12 Jan 2007 18:32 By : Agencies Print this Story

(Updates with full report)

MILAN (AFX) - Share prices closed higher, supported by the outlook for stable eurozone interest rates up to March, and led by Pirelli on reports that India's Hinduja Group is considering taking a stake in Pirelli's unit Olimpia, which owns 18 pct of Telecom Italia, brokers said.

The Mibtel index was up 0.34 pct to 32,318 points and the S&P/Mib up 0.40 pct to 42,111.

Volume was an estimated 5.272 bln eur.

Brokers said the market continued to win support from yesterday's decision by the European Central Bank to leave its interest rates unchanged. One broker said he sees a 0.25 pct point rise in March.

The oil price remains another factor for stocks, after the recent downward trend. One broker said he sees the oil price more likely to go up than down, with current prices being a support level.

Pirelli rose 3.71 pct to 0.819 eur. Brokers said they don't see political opposition to Hinduja taking a minority stake in Olimpia, though full control would be opposed by government.

Telecom Italia rose 1.00 pct to 2.3775.

In the banking sector, Popolare di Verona rose 1.98 pct to 23.18 and Popolare Italiana 1.66 pct to 11.50, both after 'buy' notes from Deutsche Bank, including an upgrade from 'neutral' for Popolare Italiana.

Intesa Sanpaolo gained 0.73 pct to 5.78 after Citigroup reiterated its 'buy' rating, upping its price target to 6.4 eur, from 5.7.

Among insurers, Generali was up 0.18 pct to 34.00 after Lehman downgraded the stock to 'underweight', from 'equalweight'. Alleanza lost 0.27 pct to 10.17 after Lehman rated the stock 'underweight'.

Unipol rose 0.95 pct to 2.87. Lehman rated the stock 'overweight' in its insurance sector review.

Among oils, Tenaris rose 2.30 pct to 19.39. Eni lost 0.69 pct to 24.60. One broker said reports on sale of generating plants to Gazprom were suggesting higher prices that it had estimated for these assets.

Saipem lost 0.56 pct to 18.55.

Parmalat was a strong loser, down 2.15 pct to 3.27. Brokers said there was an absence of further news on any settlement of its legal claims.

STMicro fell 1.29 pct to 14.59 after recent gains.

Lottomatica rose 1.29 pct to 33.71, though off its highs. Analysts said its business plan due shortly will focus on expansion, adding there are risks in carrying this out in developing country markets.

nigel.tutt@afxnews.com

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