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German Stocks Decline on Monti Exit, Greek Buyback Delay

By Namitha Jagadeesh - Dec 10, 2012


German stocks declined for a second day as Italian Prime Minister Mario Monti said he plans to resign and Greece extended the deadline on a bond buyback offer.

Deutsche Bank AG (DBK) and Commerzbank AG (CBK), Germany’s biggest banks, dropped at least 2 percent. RWE AG (RWE) lost 1.5 percent after Bank of America Corp. recommended investors sell the shares. Curanum AG (BHS) jumped the most in five months after French rival Korian made a bid on the company.

The DAX (DAX) slipped 0.5 percent to 7,483.52 at 10:28 a.m. in Frankfurt. The gauge has still rallied 25 percent from its low on June 5 as European Central Bank policy makers agreed on an unlimited bond-purchase program and the Federal Reserve announced a third round of quantitative easing. The broader HDAX Index also dropped 0.5 percent today.

Monti said he plans to resign after losing support in Parliament, while his predecessor Silvio Berlusconi intends to seek a return to power. Monti will try to win the approval of his coalition partners, including Berlusconi’s People of Liberty Party, for a vote to pass the budget before resigning, President Giorgio Napolitano’s office said in a statement on Dec. 8.

Greece extended a deadline to spend 10 billion euros ($12.9 billion) buying back sovereign debt until midday tomorrow, according to the country’s Public Debt Management Agency. The indebted nation was close to reaching its target in a program aimed at winning aid from the International Monetary Fund and the European Union, an official at the Greek Finance Ministry said yesterday on condition of anonymity.

Banks Fall

Deutsche Bank slid 2.1 percent to 33.83 euros and Commerzbank retreated 2.8 percent to 1.36 euros. A gauge of banks contributed the most to the Stoxx Europe 600 Index’s decline today.

Deutsche Bank Chairman Paul Achleitner will investigate former employees’ allegations of false accounting, Der Spiegel reported on Dec. 9 without saying where it got the information.

MORE - http://www.bloomberg.com/news/2012-12-10/german-stocks-decline-on-monti-exit-greek-buyback-delay.html