Snecma supplies engines to aircraft makers worldwide

Snecma's shares finished their first day of trading up 0.64% at 15.7 euro; leading shares closed up 0.6%.

It is the first in a series of privatisations aimed at plugging a gap in France's public finances.

However, proceeds from the sale look set to fall short of the government's initial hopes.

The government had set a price of 15.7 euro per share for institutional investors and 15.6 for retail investors.

But that is at the bottom end of the government's target range of 15.45 - 17.2 euros, reflecting fears that rising oil prices may deter aircraft makers, Snecma's main customers, from placing new orders.

Nonetheless, demand for Snecma stock is reported to have outstripped supply, with some 800,000 private investors signing up to take part in the offering.

A share price within the expected 15.4 - 16 euro range would value the firm at between 4.2 and 4.3bn euros.

More sell-offs

"It was a very smooth process," said analyst for the bank ABN Sandy Morris.

The French government also hopes to sell stakes in other state-owned assets, including former telephone monopoly France Telecom, national airline Air France, and energy utilities Electricite de France (EdF) and Gaz de France (GdF).

The privatisation programme is aimed at narrowing France's public deficit, which is on track to exceed 3% of gross domestic product, the maximum allowed under European Union rules, for the third year running.

But the plan has run into stiff opposition, with trade unions mounting a series of strikes in protest against the proposed sell-off of EdF and GdF.

Walkouts have triggered localised power cuts on two occasions over the last month, and further industrial action is expected in the weeks ahead.