Milan shares lower at midday but off lows; Enel leads decline

Milan shares lower at midday but off lows; Enel leads decline

	Published : Wed, 28 Feb 2007 13:28 By : Agencies Print this Story

MILAN (AFX) - Milan shares reduced losses by midday but were still lower amid fears over growth prospects in the US, with Enel leading the decline after its surprise move to buy 9.99 pct in Endesa, dealers said.

At 13.00 pm, the Mibtel index was down 0.45 pct at 32,027 while the S&P/Mib fell 0.54 pct at 41,392.

'Not much has changed but there is more growth uncertainty and this leads to a general aversion to risk,' said Bank Insinger de Beaufort fund manager Gianmaria Bergantino, adding that US GDP data later today will determine whether the correction will come to an end.

Enel shares lost 2.16 pct at 7.94 eur as analysts saw the move as going against the group's 'small steps' acquisition strategy, with the company paying 4.126 bln eur for the stake.

Enel's move however helped Autostrade and Telecom Italia for which Spain's Abertis and Telefonica expressed an interest.

According to Bergantino, Enel's move could make it easier to bring back to life the Autostrade-Abertis merger, which failed at the end of last year due to regulatory uncertainty and opposition from Italy's centre-left government.

Autostrade was up 1.72 pct at 22.41.

The fund manager added that the 'Spanish-Italian axis could mean that the government will not place hurdles' in the entry of Telefonica in Telecom Italia.

According to the Financial Times, Telefonica aims at buying from Pirelli an 'effective stake' of 5.5 pct in the Italian operator.

Telecom Italia was up 0.54 pct at 2.31 while Pirelli gained 0.8 pct at 0.86.

Also leading the fall was AEM, down 1.33 pct at 2.5575 among continued uncertainty over its merger with ASM Brescia.

The mayors of the towns of Milan and Brescia, which respectively control AEM and ASM, met this morning to discuss the possible merger.

ASM shares lost 0.59 pct at 4.405.

Fiat was up 1.87 pct at 18.12 after wire service Radiocor cited chief executive Sergio Marchionne as saying that the group's activities in the first two months of this year are in line with expectations.

yael.schrage@thomson.com

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