(Adds broker comments on possible China deal)
MILAN Jan 14 Shares in Italian car maker Fiat
rose more than 6 percent on Monday, helped by positive
broker notes and talk of an imminent announcement of a deal to
produce Jeep vehicles in China.
Traders noted Fiat was removed from broker Equita's "least
preferred list" and suggested that some hedge funds might have
decided to reduce their short positions on the stock.
Earlier on Monday, UBS raised its target price on Fiat to 4
euros from 3.5 euros. The broker has a neutral rating.
Italian newspaper Corriere della Sera said on Sunday Fiat
and its U.S. unit Chrysler were set to sign a new agreement with
Guangzhou Automobile Group Co (CAG) to produce Jeep
vehicles for the Chinese market.
Fiat and Chrysler boss Sergio Marchionne could announce the
deal at the Detroit auto show, which kicks off on Monday, it
Banca Akros analysts said China would be a key market to
help Fiat reach or exceed a medium term target of selling
800,000 Jeeps per year.
"The announcement would also demonstrate that the Fiat/GAC
partnership is working well and that GAC is a reliable partner
for future developments," they said.
A Fiat spokesman declined to comment on Monday.
By 1225 GMT, Fiat shares were up 4.5 percent at 4.31 euros,
having traded as high as 4.398 euros. The European auto index
was 1.2 percent higher.
(Reporting by Maria Pia Quaglia and Danilo Masoni; Editing by