Sept. 26 (Bloomberg) -- German stocks advanced, paced by Siemens AG and E.ON AG after the companies said they will jointly build a natural-gas power plant.

Insurers including Munich Re gained after estimates for damage claims from Hurricane Rita were reduced because the hurricane spared refineries near Houston.

The benchmark DAX Index rose 88.65, or 1.8 percent, to 4971.23 as of 11:20 a.m. in Frankfurt. Twenty-nine of the benchmark's 30 stocks rose, pushing the index to its biggest gain since Oct. 1, 2004. DAX December futures were up 1.4 percent. The HDAX Index of the country's 110 biggest stocks rose 1.7 percent.

E.ON, the world's largest publicly traded electricity company, and Siemens plan to jointly build a natural-gas fueled plant for 700 million euros ($843 million). Siemens will build for the plant a 340-megawatt natural-gas fired turbine, the world's largest.

Separately, E.ON agreed to buy Caledonia Oil & Gas Ltd., a U.K. oil and gas exploration company, for 470 million pounds ($834 million) to move into natural-gas as it seeks to secure fuel supplies.

Siemens shares rose 1.32 euros, or 2.1 percent, to 63.42 euros. E.ON AG gained 1.21 euros, or 1.6 percent, to 77.15 euros.

Munich Re, Hannover Re

Insurers may have to pay $4 billion to $7 billion in Rita claims, according to Risk Management Solutions Inc. Earlier estimates had been as high as $20 billion.

Munich Re, the world's largest reinsurer, climbed 2.6 percent to 92.37 euros. Allianz AG, Europe's No. 1 insurer, rose 1.9 percent to 106.62 euros. Hannover Re, the world's fourth- biggest reinsurer, gained 4.6 percent to 28.92 euros. Will Morgan, an analyst at Goldman, Sachs & Co., raised his recommendation on Hannover Re shares to ``outperform'' from ``in-line.''

The following stocks rose or fell in Germany. Stock symbols are in parenthesis after the company name.

Bayer AG (BAY GR), Germany's second-largest chemical company, added 64 cents, or 2.2 percent, to 30.05 euros. Chemical makers rose after crude oil had its biggest three-day drop in more than two weeks. Crude oil for November delivery fell for a third day, declining as much as $1.54, or 2.4 percent, to $62.65 a barrel in New York.

BASF AG (BAS GR), the world's largest chemical maker, gained 1.25 euros, or 2.1 percent, to 60.65 euros.

Commerzbank AG (CBK GY), Germany's third-largest bank by market value, gained 30 cents, or 1.4 percent, to 22.34 euros. Chief Executive Officer Klaus-Peter Mueller doesn't expect significant cross-border mergers among European banks, including his own, in part due to regulations and resistance from governments, Handelsblatt said.

Conergy AG (CGY GR), a German maker of machines powered by solar cells, jumped 3.74 euros, or 3.9 percent, to 98.94 euros. Conergy will exceed its 2005 sales target of 500 million euros because of better-than-expected overseas revenue, Boersen-Zeitung reported, citing the company.

K+S AG (SDF GY), the maker of potash used in fertilizers, rose 1.12 euros, or 2 percent, to 56.62 euros. K+S expects full- year profit and sales to be at the top end of the range targeted because of higher demand for the company's products and cost cuts, Financial Times Deutschland said, citing Chief Executive Ralf Bethke.

Porsche AG (POR3 GY), maker of the 911 sports car, fell 60.87 euros, or 9 percent, to 617 euros, its biggest one-day fall in two- and-a-half years. Porsche said it's acquiring 20 percent of Volkswagen AG's common stock to prevent a hostile takeover that would undermine the companies' partnership

Fredrik Westin, an analyst at WestLB Equity Markets, cut his recommendation to ``neutral'' from ``outperform.'' Christian Breitsprecher, an analyst at Deutsche Bank, cut his recommendation to ``sell'' from ``buy'' and 12-month price target to 550 euros per share from 740.

Salzgitter AG (SZG GR), Germany's largest steelmaker, gained 1.38 euros, or 3.6 percent, to 39.63 euros. Michael Tappeiner, an analyst at WestLB Equity Markets, increased his recommendation to ``outperform'' from ``neutral'' and his 12-month price target to 45 euros per share from 40.

Sixt AG (SIX2 GY), Germany's largest auto-rental company, rose 64 cents, or 3.1 percent, to 21.34 euros. Wolfgang Fickus, an analyst at WestLB Equity Markets, rated the shares ``buy'' in new coverage and set a 12-month price target of 26 euros per share.

To contact the reporter on this story: Martin Boer in Amsterdam at mboer1@bloomberg.net

Last Updated: September 26, 2005 06:55 EDT