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Italian share

prices drop

MILAN: Italian shares were marked down in a late bout of selling prompted partly by hedging activity as domestic investors switched from the cash market into futures after early afternoon sell orders came in from overseas.

The Mibtel index finished 0.75 percent lower at 10,470 while the blue chip Mib30 index ended the day 0.88 percent down at 15,514.

"Italian investors are heavily involved in the cash market and they started to get nervous when the foreign selling started," Milan-based stockbroker said.

One analyst said the market had dropped through a support level of 10,520 on the Mibtel index and further declines were possible.

Among blue chip stocks only Telecom Italia Mobile (TIM.MI) and Ferruzzi Finanziaria spared.

Ferruzzi closed 2.27 percent higher at 1,215 lire, lifted by talk of a merger with Montedison expectations that the group will sell cement maker Calcestruzzi.

TIM ended 1.65 percent higher at 2,285 lire in a technical rebound. "It was a technical thing, investors were covering themselves," an analyst said.

Mediobanca fell 3.11 percent to 12,757 lire, depressed by rumours that the merchant bank is planning a large rights issue.

A downgrading from S.G. Warburg of its rating on Istituto Mobiliare Italiano Spa (IMLI.MI) came too late to have any impact on the Italian bank, which closed slightly above the day's lows, at 10,113 lire, a decline of 1.4 percent.-Reuter