European stock markets advanced in the week from the 16th to the 20th of January 2012 (Milan +4.1%, London +1.6%, Frankfurt +4.3%, Paris +3.9%). Investors reacted positively to the newsflow around the Euro sovereign debt crisis, such as the strenghtening of the EFSF (worth $500 bln), the possible conclusion of the negotiations between Greece and private sector creditors and the increase in Euro-area bond purchases by the ECB in the secondary market (€3.7 bln). Over the week, the spread between Italian BTPs and German Bunds narrowed significantly.
Auto & Parts stocks were up strongly: sector index Stoxx posted a +8.9% increase over the week, as broker Goldman Sachs affirmed the attractiveness of the sector while upgrading Pirelli to Buy rating and increasing its Price Objective to €14.3 (from €9.4), making it the highest in the coverage universe. Pirelli closed the week up +9.6% at €7.22
Pirelli Investor Relations