Lisbon shares close sharply lower led by heavyweights EDP, BCP UPDATE

Lisbon shares close sharply lower led by heavyweights EDP, BCP UPDATE

	Published : Tue, 27 Feb 2007 18:36 By : Agencies Print this Story

(updating with full report)

LISBON (AFX) - Shares closed sharply lower, tracking major European markets, led by heavyweights EDP and BCP with Portugal Telecom and its cable and media unit PT Multimedia outperforming the market, dealers said.

The PSI 20 index closed down 235.09 points or 1.95 pct at 11,815.95, after trading in a range of 11,805-12,036.

Equities opened lower pressured by weaker Wall Street and Asian markets overnight and stayed in negative territory throughout the rest of the session, especially after a negative opening in Wall Street.

All the stocks in the PSI 20 index closed lower, except for PT and PTM, which closed flat.

'Many investors were saying recently that the market was expensive due to recent M&A activity so this was probably the excuse the market needed to correct,' said a trader at a leading Portuguese investment bank.

He added that he expects the market to remain in negative territory for the rest of this week.

Blue chip EDP shed 0.09 eur or 2.10 pct to 4.19, adding to earlier losses in the session.

Another heavyweight, BCP, was down 0.07 or 2.44 pct at 2.80. Also in the banking sector, Banco BPI shed 0.04 at 6.41 and BES declined 0.32 or 2.20 pct at 14.20.

Portugal Telecom was flat at 10.13 and PT Multimedia was steady at 11.00.

'Maybe some investors expect some positive news to come out of PT's EGM on Friday, that's about the only thing that can explain this close,' said the investment bank trader. However, he noted that there was not much liquidity in PT today.

PT's EGM is scheduled for Friday to vote on removing the 10 pct voting right limits, a major hurdle for Sonaecom to succeed in its takeover bid for its larger rival.

Sonae dropped 0.07 or 4.14 pct to 1.62 and its telecom unit Sonaecom was down 0.24 or 3.83 pct at 6.02, amid continuing fears its takeover bid for PT might not get past the operator's Friday EGM.

Energy group Galp was off 0.11 or 1.54 pct at 7.02, after gaining 3 pct yesterday after it broke out of its trading range Friday.

Paper and pulp related stocks also weighed on the index, with Portucel dropping 0.13 or 4.58 pct to 2.71, Semapa slumping 0.82 or 6.74 pct to 11.35 and Altri down 0.12 eur or 2.03 pct at 5.78, after recent gains.

Highway concessionary Brisa lost 0.21 to 9.99, after outperforming the market earlier in the day supported by bullish traffic forecasts for 2007 in the wake of yesterday's in-line 2006 results.

'Positive traffic growth in the fourth quarter of 2006 hints at the possibility that the company may be beginning to see the light at the end of the tunnel,' said Exane Paribas in a note to clients.

Average daily traffic on Brisa's roads increased 0.8 pct in the fourth quarter of last year compared to a fall of 3.1 pct reported in the first nine months, breaking a negative tendency seen since the third quarter of 2004.

luis.morais@thomson.com

lm/jlc

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited