June 30 (Bloomberg) -- German stocks including Deutsche Telekom AG rose after the company's T-Online unit agreed to buy a Spanish phone company to allow it to gain European customers.

RWE AG and E.ON AG climbed after the utility companies' share-price forecasts were raised by Dresdner Kleinwort Wasserstein analysts.

The benchmark DAX Index added 19.46, or 0.4 percent, to 4603.49 as of 3:33 p.m. in Frankfurt, taking the monthly advance to 3.2 percent. The index is poised for a quarterly gain of 5.9 percent, the third such consecutive rise. DAX September futures added 0.7 percent to 4623. The HDAX Index of the country's 110 biggest companies rose 0.4 percent to 2370.92.

Deutsche Telekom, Europe's largest phone company, rose 26 cents, or 1.7 percent, to 15.35 euros.

T-Online International agreed to buy the phone unit of Spain's Red Electrica de Espana SA for 35 million euros ($42.3 million) to help capture rising demand for faster Web access. The purchase will add 25 million euros to earnings before interest, tax and depreciation, T-Online said.

Deutsche Telekom ``still has quite a lot of upside, and that stands out in a market where we're not seeing a lot of opportunities across Europe,'' said Adrian Darley, a fund manager at Gartmore Investment Management Ltd. in London which manages about 70 billion euros for clients. He said Gartmore increased the number of shares it held in Deutsche Telekom ``in the past couple of couple weeks.''

Higher Power Prices

RWE, Germany's largest electricity producer, rose 1.26 euros, or 2.4 percent, to 53.56 euros. E.ON, the country's No. 1 utility, increased 1.09 euros, or 1.5 percent, to 73.84. Analysts at Dresdner Kleinwort Wasserstein raised the share-price forecasts to 64 euros from 54 euros and to 88 euros from 77 euros, respectively. They expect higher power prices to boost earnings.

The following stocks are making gains or losses. Stock symbols are in parentheses after the company names.

CeWe Color Holding AG (CWC GY) climbed 1.75 euros, or 4.4 percent, to 41.90. Europe's largest independent photo developer raised its sales forecast for this year, saying revenue will gain 5 percent to 450 million euros because of increased demand for digital prints. CeWe in April predicted a figure of 437 million euros.

MPC Capital AG (MPC GY), a financial-services company, jumped 2.99 euros, or 6.1 percent, to 52.10. Juergen Hackenberg, an analyst at UBS AG, upgraded the shares to ``buy 2'' from ``neutral 2,'' citing the view the stock's price doesn't reflect the company's earnings outlook.

ProSiebenSat.1 Media AG (PSM GY) climbed 32 cents, or 2.3 percent, to 14.50 euros. Axel Springer AG, Europe's biggest newspaper publisher, will start to examine the books of ProSiebenSat.1 next week to ponder the risks and opportunities of a possible takeover, Tagesspiegel said, citing unidentified people familiar with the talks. Axel Springer (SPR GY) shares didn't trade.

Hannover Rueckversicherung AG (HNR1 GY) fell 57 cents, or 1.8 percent, to 31.23 euros. Morgan Stanley, the world's largest securities firm, sold a 31.2 million-euro ($37.6 million) stake in the German reinsurer for 31.20 euros a share.

To contact the reporter on this story: Margo Towie in Brussels at mtowie@bloomberg.net.

Last Updated: June 30, 2005 10:06 EDT