STOCKS NEWS EUROPE-Finmeccanica up on report of Chinese interest in rail unit

Shares in Italian defence group Finmeccanica (Other OTC: FINMF - news) rise as much as 1.6 percent after a weekend newspaper report that China's CNR Corporation and Insigma were interested in its rail technology unit Ansaldo STS (Milan: STS.MI - news) and loss-making train maker AnsaldoBreda.

Italian daily Corriere della Sera said on Saturday (Shenzhen: 002291.SZ - news) that CNR and Insigma had sent a letter of intent to Finmeccanica to express their interest in Ansaldo STS and AnsaldoBreda. The companies would be prepared to flank an Italian investor such as the state holding CDP's investment arm FSI, the report says.

"Any news about potential buyers for loss-making AnsaldoBreda is helping the stock," a Milan-based trader says.

Finmeccanica declines to comment on the report. The company, in which the state owns a 30 percent stake, has put its rail and other non-core assets up for sale nearly two years ago to cut debt and focus on aerospace and defence.

At 1027 GMT, the stock is up 0.42 percent at 7.16 euros, after previously rising 1.61 percent to 7.245 euros. Milan's blue-chip index is down 0.6 percent.

Reuters messaging rm://agnieszka.flak.thomsonreuters.com@reuters.net