Euroshares open lower as rout continues, E.ON falls as Enel takes Endesa stake

Euroshares open lower as rout continues, E.ON falls as Enel takes Endesa stake

	Published : Wed, 28 Feb 2007 09:51 By : Agencies Print this Story

LONDON (AFX) - Europe's largest exchanges moved lower again in opening deals as weakness across global markets weighs with utilities lower after Enel bought a 9.99 pct stake in Endesa overnight, dealers said.

At 08.26, the STOXX 50 was down 46.65 points at 3684.36 and the STOXX 600 was down 5.6 points at 364.96.

Last night, the DJIA had its worst day of trading since September 11, 2001 -- the first day of trading after the terrorist attacks in the US.

The Blue Chip index fell 546.20 intra-day before recovering some ground in the last hour of trading to close down 416.02, or 3.29 pct, at 12,216.24.

The drop hit every sector across the market and traders note volumes were a massive 2.4 bln shares with down volumes outstripping up volumes by 140 to one.

Confidence was knocked further by durable goods data which showed the economy may be decelerating more than anticipated.

The correction continued in Asian trade with the Nikkei down 515.80 points at 17,604.12 at the close and the Hang Seng down 496.36 points at 19,651.51.

Crude prices also plunged in Asian trade in reaction to steep falls in the Chinese stock market yesterday.

At 04.00 GMT, New York's main oil futures contract, light sweet crude for delivery in April, was down 1.17 usd at 60.29 usd per barrel from 61.46 usd in late US trades overnight.

Enel said it has bought a 9.99 pct stake, or 105.9 mln shares, in Endesa at 39 eur per share, throwing E.ON's hopes to buy the Spanih utility into disarray.

This morning, La Repubblica said Enel wants to boost its stake in Endesa to 25 pct.

E.ON led the STOXX 50 fallers as the news prompted WestLB to cut its rating on the German utility to 'hold' from 'buy', saying the news was a blow to E.ON's ambitions and adds to the uncertainty around the stock.

And Enel shares fell 3.45 pct as it is widely expected to continue to raise its stake in Endesa and as the move goes against Enel's stated 'small steps' acquisition strategy and adds to uncertainty over the stocks prospects.

deborah.hyde@afxnews.com

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