Stocks Rise on German Rate Cut
May 04, 2011
The MIBtel index rose 116 to 9714, while the MIB-30 index of blue-chip stocks advanced 199 to 14548 on relatively low volume. Germany's central bank cut its repo rate to 3% from 3.30%, providing the incentive for other European markets to make similar moves. However, market players said investors remained distracted as they awaited figures on preliminary August consumer price data from the four Italian cities that have yet to report. While analysts expected the data to confirm that prices are falling, they noted that investors were more concerned about the strength of the center-left government and the parliamentary fate of the 2012 budget this autumn. Among actively traded shares, agroindustrial and chemical company Montedison rose 25 lire to 1,026 after it was announced that financier Lucio Peacock had sold most of his Montedison stake. Merrill Lynch also recently reduced its stake in the holding, and traders said that they expected Montedison shares would have some room to breathe as the round of selling pressure looked to be over. Energy company ENI climbed 160 lire to 6,865. Traders said the stock was boosted by short covering related to derivatives trading.
