German stocks rose to the highest level in 28 months as the Federal Reserve begins a two-day meeting that’s expected to provide additional stimulus measures to help the economic recovery.
Fresenius SE advanced 2.6 percent as the parent company of the world’s biggest provider of kidney dialysis raised its outlook for 2010. ThyssenKrupp AG followed metal prices higher. Fielmann AG and Sky Deutschland AG dropped as analysts downgraded the shares.
The DAX Index climbed 0.8 percent to 6,654.31 at the 5:30 p.m. close in Frankfurt, the highest level since June 19, 2008. The measure rallied 6 percent in October as investors speculated that policy makers at the Fed would announce another round of asset purchases, a tactic known as quantitative easing, at this week’s meeting. The broader HDAX Index gained 0.7 today.
“It’s a very important and exciting week for equity markets,” said Matthias Jasper, head of equities at WGZ Bank AG in Dusseldorf. “The market’s expectations about the quantitative easing program are very high. The macroeconomic data is still encouraging and we’re going to see a year-end rally.”
Fed policy makers meeting today and tomorrow will restart a program of securities purchases to spur growth, reduce unemployment and increase inflation, said 53 of 56 economists surveyed last week. Twenty-nine forecast the bank will pledge to buy $500 billion or more, while another seven predicted it will buy $50 billion to $100 billion in monthly purchases without specifying a total. The remainder said the Fed would buy as much as $500 billion or they didn’t quantify their estimates.
Europe’s manufacturing industries expanded at a faster pace in October than initially estimated as export demand strengthened, a report showed today. A gauge of manufacturing in the 16-nation euro region rose to 54.6 from 53.7 in the previous month, London-based Markit Economics said. It had previously reported an increase to 54.1 in October. A reading above 50 indicates expansion.
Fresenius preferred shares gained 2.6 percent to 64.89 euros, erasing yesterday’s 1.8 percent decline. The company said it expects this year’s net income to rise 20 percent.
ThyssenKrupp, Germany’s biggest steelmaker, rose 1.4 percent to 26.72 euros as aluminum, copper, lead, nickel, tin and zinc gained on the London Metal Exchange.
K+S AG advanced 1.6 percent to 50.85 euros as Europe’s biggest potash producer reported a jump in third-quarter profit and raised its target for 2010 after prices for the crop nutrient gained.
BASF SE surged 3.2 percent to 54.23 euros. The world’s biggest chemical company and Monsanto Co. said they have made “significant progress toward launching next-generation dicamba- based weed control systems for soybeans and cotton.” Dicamba formulations could be available globally for farmers “this decade,” the companies said in a joint statement.
Fielmann fell 2.6 percent to 71.10 euros, the biggest decline in almost two months. BofA Merrill Lynch Global Research cut its rating on Europe’s largest chain of opticians to “underperform” from “neutral.”
Sky Deutschland slid 13 percent to 1.11 euros, ending the longest winning streak in five years. The pay-television operator was downgraded to “neutral” from “buy” at UBS AG, which said subscriber growth may disappoint.
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