The report, which was cited by traders as the reason for the brief jump in PSA's shares, said a full or partial sale was being considered.

PSA "does not comment on rumours", the company said in a statement sent to Reuters.

The French carmaker's board has not received any notification or signal that Dongfeng planned to reduce its stake, a source close to the company said.

The surge in PSA's shares was short-lived.

By 1205 GMT, the stock was up just 0.6 % at 20.08 euros, lagging the benchmark Paris CAC-40 <.FCHI> equity index which was up by around 1%.

(Reporting by Danilo Masoni in Milan, Sudip Kar-Gupta and Laurence Frost in Paris; Editing by Josephine Mason)