DAX Benchmark Index Advances; BASF, Infineon Rise, Bayer Shares Decline

German stocks rose, as advances in Infineon Technologies AG and BASF SE outweighed declines in Bayer AG and Beiersdorf AG.

Infineon rose 2.1 percent after the Wall Street Journal said it may pay a full-year dividend. BASF climbed after it raised its profit estimate for this year. Bayer slipped 1.3 percent after U.S. regulators approved a rival’s drug, while Beiersdorf fell 1 percent after Royal Bank of Scotland Group Plc cut its recommendation on the shares.

The benchmark DAX Index rose 0.5 percent to 6,524.55 at the 5:30 p.m. close in Frankfurt. The measure advanced 3.2 percent last week as investors speculated that the U.S. Federal Reserve will announce plans to stimulate economic growth at its November meeting. The broader HDAX Index rose 0.6 percent today.

Bank of England Governor Mervyn King said yesterday that some gauges of U.K. inflation are “extremely subdued,” signaling that he may be open to stepping up bond purchases.

“Investors are digesting the news from the Bank of England, which showed support for another round of quantitative easing in the U.K., while disappointing earnings from TomTom and others have equity investors reducing their risk appetite a bit,” said Mads Koefoed, a market strategist at Saxo Bank A/S in Copenhagen.

Infineon climbed 2.1 percent to 5.61 euros, paring two days of losses. The chipmaker may pay a dividend for the full year that ended Sept. 30, the Wall Street Journal reported.

BASF rose 2.6 percent to 51.93 euros, its fifth gain in six days. The world’s biggest chemical maker raised its profit estimate for 2010 after recovering markets helped lift third- quarter profit beyond analysts’estimates. The company said it sees a “good business development” in the fourth quarter, with full-year earnings before interest, tax and special items exceeding 8 billion euros ($11 billion).

Bayer, Germany’s largest drugmaker, dropped 1.3 percent to 54.18 euros, its fourth loss. U.S. regulators approved a blood- thinning drug by Boehringer Ingelheim GmbH, beating Bayer’s Xarelto to the world’s biggest drug market.

Beiersdorf, Infineon

Beiersdorf tumbled 1 percent to 46.53 euros, falling for the second day. The maker of Nivea handcream was cut to “hold” from “buy” at RBS.

“We see no obvious catalyst for near-term share price outperformance in the absence of forecast upgrades or M&A activity,” RBS wrote in a note.

Deutsche Lufthansa AG slipped 0.8 percent to 14.87 euros, extending yesterday’s 2.5 percent fall. Europe’s second-biggest airline was cut to “neutral” from “overweight” at HSBC Holdings Plc.

Carmaker Daimler AG rose 1.6 percent to 47.80 euros, erasing yesterday’s 1.5 percent fall. Rival PSA Peugeot Citroen advanced 2.8 percent in Paris after it raised its 2010 operating profit forecast.

To contact the reporter on this story: Adam Ewing in Stockholm at aewing5@bloomberg.net.

To contact the editor responsible for this story: David Merritt at merritt1@bloomberg.net.

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