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Sunday 12th of October 2008
November 27, 2006

European utilities lower on merger talk


by Elaine Frei

The FTSE Eurofirst 300 dropped 1.5 percent on Monday to close at 1,429.00. The declines was the Eurofirst’s furthest one-day fall in nearly six months.

Utilities were down after the announcement last week that the merger between Gaz de France and Suez was being delayed, as some hoped that Italian utility Enel might yet engineer a merger with Suez. Most analysts were skeptical of the possibility, and Enel dropped 1 percent to €7.59. Suez and Gaz de France were also lower, by 0.3 percent to €35.86 and by 0.6 percent to €32.27 respectively. Elsewhere in the sector, RWE dropped 0.6 percent to €86.05 even though it had gone as high as €90.81, an all-time high, earlier on rumors that Gazprom could be thinking about bidding.

Stock exchanges were also lower as investors took profits. Euronext dropped 3.4 percent to €92.25, while Deutsche Borse was 3.9 percent lower to €129.97.

The automobile manufacturing sector dropped on worries about the state of the US dollar. Volkswagen fell 1.6 percent to €80.01, while Peugeot dropped 2.5 percent to €46.78 and DaimlerChrysler was 2.8 percent lower to €44.25.

Tire makers were also lower, with Continental down 3.5 percent to €86.10 and Michelin dropping 4 percent to €65.20.

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