German Stocks Climb on U.S. Retail Sales, China Factory Output
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By Cornelius Rahn
Dec. 11 (Bloomberg) -- German stocks advanced for a second day, with the benchmark DAX Index trimming its weekly decline, after reports showed U.S. retail sales and China’s industrial output grew more than economists forecast.
Linde AG surged 3.9 percent after Morgan Stanley recommended the world’s second-biggest maker of industrial gases. BASF SE, the largest chemical maker, completed its longest stretch of weekly gains since 2008. Volkswagen AG rose 1.2 percent as the carmaker reported higher group sales.
The DAX added 0.8 percent to 5,756.29. The gauge posted a 1.1 percent drop this week after falling in the first three days on concern Fitch Rating’s state-debt downgrade on Greece and Standard & Poor’s negative outlook for Spain could herald further sovereign grade cuts. A first-half loss at Nakheel PJSC, the Dubai World-owned property developer seeking to renegotiate debt, also pulled equities lower. The broader HDAX Index also increased 0.8 percent today.
“Recent U.S. data have shown a stronger upswing than investors had anticipated,” said Matthias Jasper, head of equities at WGZ Bank in Duesseldorf. “If it goes on like this, interest-rate hikes may be on the table more quickly, too. For the rest of the year, there is room to the upside.”
Retail purchases in the U.S. increased 1.3 percent in November, surprising economists who had forecast a 0.6 percent gain, a Bloomberg News survey showed. Purchases excluding autos climbed 1.2 percent, also more than anticipated and the biggest gain since January.
Linde, BASF
China’s factory output surged 19.2 percent last month from a year earlier, the statistics bureau said in Beijing, exceeding the 18.2 percent median estimate in a Bloomberg News survey of 25 economists.
Linde jumped 3.9 percent to 85.60 euros, its biggest advance since April. The company was raised to “overweight” from “equal-weight” at Morgan Stanley, which said “consensus is failing to recognize the recovery potential in sales in the medium term.”
BASF advanced 1.9 percent to 43.04 euros, completing its sixth week of gains. Chief Executive Officer Juergen Hambrecht may avoid making the company’s first dividend cut for 16 years after an unexpected spurt in orders, analysts said. BASF is able to earn its cost of capital this year, Hambrecht’s prerequisite for maintaining investor payouts, according to WestLB AG’s Norbert Barth.
Bayer, Volkswagen
Bayer AG advanced 1.9 percent to 54.43 euros, climbing for a third straight day. Onyx Pharmaceuticals Inc. and Germany’s largest drugmaker said their Nexavar pill, used with the chemotherapy drug paclitaxel, delayed the growth of tumors that had spread or recurred, extending the lives of women with advanced breast cancer.
Volkswagen, Europe’s biggest automaker, added 1.2 percent to 81.67 euros, capping its first weekly gain in almost two months. The company said group deliveries increased 19 percent to 531,300 vehicles in November from a year earlier.
Allianz SE, Europe’s biggest insurer, rose 1.7 percent to 84.60 euros. The company is optimistic on the outlook for directors and officers insurance after claims peaked and prices began rising in some industries, Allianz executives said.
K+S AG, Europe’s biggest potash producer, advanced 1.6 percent to 42.25 euros. The company sold new shares valued at 689 million euros ($1.01 billion) to improve its balance sheet and secure an investment-grade rating.
RWE AG, Germany’s second-largest utility, posted a second weekly gain and climbed 1.3 percent to 64.39 euros today. The company will win back about 100,000 electricity clients this year, Chief Operating Officer Ulrich Jobs said.
The following stocks rose or fell in German markets. Symbols are in parentheses.
Carl Zeiss Meditec AG (AFX GY) surged 4.8 percent to 12.05 euros, its biggest jump in a month. The maker of medical lasers to correct vision defects was raised to “add” from “hold” at Commerzbank AG and to “buy” from “hold” at UniCredit Markets & Investment Banking.
Separately, the company appointed Christian Mueller to the management board and as chief financial officer, with effect from Dec. 15.
Drillisch AG (DRI GY) climbed 3.2 percent to 5.23 euros, snapping a four-day drop. The mobile-phone company said it had become the sole shareholder of MSP Holding GmbH after it bought United Internet AG’s stake in MSP.
ElringKlinger AG (ZIL2 GY) jumped 3 percent to 15.65 euros as the German automotive supplier was rated “buy” in new coverage at Close Brothers Group Plc.
Fraport AG (FRA GY) increased 1.3 percent to 34.93 euros after the operator of the Frankfurt airport was raised to “overweight” from “neutral” at HSBC Holdings Plc.
Q-Cells SE (QCE GY) slid 1.9 percent to 10.35 euros, a third straight decline. The solar-cell maker was rated “sell” in new coverage at Hapoalim Securities.
Stada Arzneimittel AG (SAZ GY) fell 1.8 percent to 25.89 euros, its biggest drop this month. The German generic-drug maker was cut to “neutral” from “buy” at BofA Merrill Lynch Global Research, which said “while our buy thesis was partly predicated on positive German healthcare reform proposals and cost savings, we now believe these are largely priced in.”
To contact the reporter on this story: Cornelius Rahn in Frankfurt at crahn2@bloomberg.net
Last Updated: December 11, 2009 12:25 EST
