Shares in Fiat (Milan: F.MI - news) rise 5.8 percent after reports the Italian car maker is getting closer to tightening its grip on Chrysler (Xetra: 710000 - news) and listing a merged group in New York.
"Among the news that's emerged, the market is mainly warming to the prospect of a listing in the United States," a Milan trader says.
Fiat declined to comment.
Fiat's chief executive Sergio Marchionne wants to merge the two carmakers to create the world's seventh-largest auto group and build economies of scale.
"The stock is reacting positively to news over the last few days Fiat is accelerating plans to get full control," a Milan trader says.
Sources told Reuters on Tuesday Fiat could secure financing by May for a possible buyout of the rest of Chrysler. A report by Bloomberg on Thursday said Fiat may select New York as the primary exchange for its stock after a merger with Chrysler.
At 1100 GMT Fiat shares are up 5.8 percent in a thin holiday market while the European car index is up 1.7 percent.
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