Paris – Share prices were firmer early afternoon, with investor sentiment buoyed by
robust US consumer spending figures and the retail sector in focus amid speculation of a private equity takeover.
At 12.25 pm the CAC-40 index was up 17.70 points or 0.31 pct at 5,679.95 on volume of 2.0 bln euro.
On the Matif, February CAC-40 futures were trading up 16.50 points at 5,686.5 while the euro was little changed at 1.3017 usd versus 1.3022 usd at the close yesterday.
The retail sector remained the key focus for investors after three private equity firms confirmed a possible bid for J Sainsbury PLC in the UK, fuelling speculation that other European retailers might be takeover targets.
Carrefour was the biggest blue-chip gainer in Paris, surging 1.66 eur or 3.75 pct to 45.98, while also leading the CAC-40 in volume, with 419 mln eur traded.
Fellow retail players Casino Guichard Perrachon, up 1.50 or 2.24 pct at 68.40, and PPR, up 2.30 or 2.02 pct at 116.00, were similarly lifted by the Sainsbury story.
A London-based broker said the news from the UK signalled to investors that private equity firms were 'sniffing around' for targets in the retail sector.In the leisure sector, Accor was up 1.55 or 2.43 pct to 65.30.
Earlier the group said it has sold internet travel agency Go Voyages to Groupe Arnault unit Financiere Agache, generating estimated capital gains of 200 mln eur.
Accor and Pierre & Vacances also presented details of their joint venture to develop a network of apartment hotels in Europe.
Construction group Vinci also remained higher, up 2.00 or 1.87 pct at 109.20, after the company yesterday unveiled fourth-quarter sales well ahead of market consensus and said prospects for 2007 are excellent.
Merrill Lynch reiterated its 'buy' stance on the stock and upped its target price to 119 eur from 107 eur.
Analysts at Goldman Sachs upgraded the company to 'buy' from 'neutral' and added it to their 'Conviction Buy' list, pointing out that it has underperformed the IT Services sector by 11 pct over the past three months and 28 pct over the last year.
In negative territory, Vallourec slumped 10.20 or 5.05 pct to 191.60 after the group reported lacklustre fourth-quarter sales and warned of slower revenue growth in 2007, signalling an end to three years of sharp growth.
Vallourec said it expects prices to stabilise at the current high level but analysts at Exane BNP Paribas see this as 'a sign that earnings surprises should be limited going forward'.
The other big faller among blue chips was Renault SA, down 4.25 or 4.44 pct at 91.55 following this morning's profit warning from Nissan, in which Renault holds a 44.3 pct stake.
WestLB downgraded its stance on the stock to 'reduce' from 'hold', calling the profit warning an 'alarming signal'.
Among mid-caps, Clarins was down 1.45 or 2.50 pct at 56.55 after announcing lower full-year sales Thursday evening.
Analysts at Fideuram Wargny maintained their 'hold' stance on the stock, saying any strong decline after the sales figures would offer a good buying opportunity to take advantage of the product strategy the group has been implementing these past two years.