Euroshares pull back opening losses on broker upgrades, M&A stories UPDATE

Euroshares pull back opening losses on broker upgrades, M&A stories UPDATE

	Published : Tue, 30 Jan 2007 10:49 By : Agencies Print this Story

(Updates throughout)

LONDON (AFX) - Leading European exchanges were flat in early morning deals as losses on Wall Street ahead of today's FOMC meeting were offset by a number of broker upgrades and as M&A stories boosted selected stocks, dealers said.

At 9.12 am, the STOXX 50 was up 0.01 points at 3,765.49 but the STOXX 600 was down 0.22 points at 373.12.

Alitalia soared 3.47 pct after the Italian treasury said 11 possible bidders had expressed an interest in acquiring at least 30.1 pct of the Italian flag carrier, of which the government currently owns 49.9 pct.

Among the parties who expressed an interest are Unicredit Banca Mobiliare SpA, Texas Pacific Group Europe LLP, and AP Holding SpA, which is run by businessman Carlo Toto -- head of Italian airline AirOne SpA.

Corus added 1.3 pct as CSN and Tata Steel are expected to bid for the UK steel group at today's quickfire auction, with bids expected to reach at least 5.2 bln stg.

German doll maker Zapf Creation added 4.75 pct after Financial Times Deutschland (FTD) reported that US toymaker Mattel Inc is looking for acquisition targets world-wide and has signalled it may be interested in the German group. The FTD cited a Mattel manager.

Shares in ING -- up 0.39 pct -- have been upgraded to 'overweight' from 'neutral' by JP Morgan as the broker thinks the valuation is too bearish and it expects to sees to strong momentum from the Dutch banking group in 2007.

Shares in Siemens -- up 2.16 pct -- were upgraded to 'buy' from 'neutral' by Merrill Lynch with a target price of 94 eur.

France Telecom fell 1.18 pct as the EU's lower court has upheld a fine of 10.35 mln eur imposed by the European Commission in July 2003 for abuse of its dominant position on France's high-speed internet access market.

Hypo Real Estate fell 2.42 pct after its full-year 2006 figures missed expectations and the group issued a disappointing outlook for 2007.

Veolia Environnement ticked 0.74 pct lower after its in-line full year sales report, having added over 3 pct yesterday.

'Shares are weaker today after yesterday's gains as 2006 revenues were in line but growth is less than expected after 2005 numbers were restated,' said a London based dealer.

'Warm weather in the fourth quarter will have hit all the utilities so don't use that as a stick to beat them with,' the dealer said.

Munich Re was 0.61 pct lower as it said it renewed two thirds of its property/casualty reinsurance policies as of Jan 1, representing a premium volume of around 9 bln eur.

Board member Torsten Jeworrek said in a statement that the price level of the renewals is 'attractive' and corresponds with the risks, but that competition is tougher.

Man AG fell 0.38 pct. Its shares have been downgraded to 'hold' from 'buy' at Citigroup on valuation grounds, as any synergies from potential deals with Scania and Volkswagen.

Porsche fell 0.87 as the luxury automaker was downgraded to 'hold' from 'buy' at Deutsche Bank.

Lottomatica fell 1.5 pct as CA Cheuvreux reduced its rating to 'underperform' from 'outperform' and cut its target price to 33 eur from 34 after yesterday's business plan presentation.

deborah.hyde@afxnews.com

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