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Italian equities

mostly lower

MILAN: Italian shares finished mostly lower ahead of the long weekend with the expiry of options exercising a dampening effect on the market.

"There was widespread interest in keeping cash prices below a certain level so that options would still be in the money," a broker with a major Milan finance house said.

Mib30 index closed 0.24 percent lower at 15683. Trading volumes rose to 654 billion lire from 531 billion on Thursday.

Banking stocks were particularly weak with San Paolo (IBSP. MI) closing 1.72 percent lower at 9,604 lire and Mediobanca (MDBI. MI) down 1.27 percent at 13,415 lire.

Italcementi (ITAI.MI) performed well against the trend, rising 2.38 percent to close at 12,189 lire as investors bought stock after the government announced ambitious spending plans for the south of the country on Wednesday.

State insurer INA (INAI.MI) was also well supported, closing four lire higher at 2,377 lire. Other insurers also stood their ground, Generali (GASI.MI) gaining 0.21 percent but closing well below the day's highs at 40,951 lire.

"There appears to have been some switching by investors out of banks and into insurance stocks," a Milan equities analyst said.

Fiat shares were off 0.13 percent at 6,347 lire while Telecom stocks traded in a fairly narrow range. Telecom Italia (TELI.MI) was almost unchanged at 2,867 lire, a gain of one lira on the day, while Stet 0.43 percent of its value to finish at 5,146 lire.

Rumours of a planned capital increased returned to haunt Oliveti (OLIV.MI) shares, which closed 0.55 percent lower at 1,619 lire. Analysts believe the company needs to make a cash call to finance its Omnitel mobile telephone venture.

"The company made heavy investment in Omnitel and there is a belief they have to increase their capital," a broker said.-Reuter