German Stocks Decline; BMW, Deutsche Boerse Fall as HeidelbergCement Gains
German stocks dropped for the first day in five as investors awaited the outcome of the U.S. Federal Reserve’s two-day meeting which concludes today.
Bayerische Motoren Werke AG slid 1.4 percent, even as the carmaker raised its earnings forecast. Volkswagen AG gained 0.9 percent as Societe Generale SA increased its price estimate for Europe’s largest carmaker. HeidelbergCement AG climbed 2.9 percent.
The DAX Index lost 0.6 percent to 6,617.8 at the 5:30 p.m. close in Frankfurt, having risen 12 percent since the beginning of September. The gauge yesterday jumped to its highest level since June 2008 as investors speculated that the Fed will announce another round of asset purchases, a tactic known as quantitative easing. The broader HDAX Index slipped 0.5 percent today.
“Despite an overall positive feel to the markets, traders are reluctant to commit funds until the Fed’s decision is out of the way,” said London-based Manoj Ladwa, a senior trader at ETX Capital.
U.S. policy makers will restart a program of securities purchases to spur growth, reduce unemployment and increase inflation, according to 53 of 56 economists surveyed by Bloomberg News last week. Twenty-nine estimated that the Fed will pledge to buy $500 billion or more.
BMW slid 1.4 percent to 51.64 euros even after the world’s largest luxury-car maker raised its full-year automotive operating profit to more than 7 percent of sales this year from a forecast in August of a 5 percent margin.
“The guidance is low,” said Adam Hull, a London-based analyst with WestLB AG, who has a “reduce” rating on the shares. “They should be able to do better.”
The automaker maintained its target for 2010 deliveries at more than 1.4 million vehicles, an increase of 10 percent compared with last year’s 1.29 million cars. German rival Daimler AG raised its 2010 profit target 17 percent on Oct. 28 as demand increased for its top-of-the-line Mercedes-Benz E- and S-Class cars.
Volkswagen increased 0.9 percent to 106.75 euros after Societe Generale raised its price estimate for the shares to 136 euros from 100 euros. On Oct. 22, the carmaker reported that its nine-month profit jumped more than sixfold to 4 billion euros ($5.6 billion).
“The nine-month results demand nothing less than a complete recalibration of expectations about the group’s earnings power and consequently fair value price targets,” wrote analyst Stephen Reitman in a report to clients today.
Porsche SE jumped 1.7 percent to 37.66 euros after a judge said in a preliminary assessment that the maker of the 911 sports car is likely to win an appeals case about a meeting of its shareholders in January 2009.
Minority investors in Porsche had asked the Stuttgart Higher Regional Court to strike down votes over directors’ approval of an “unconscionably” high salary for Chief Executive Officer Wendelin Wiedeking and other officials.
HeidelbergCement advanced 2.9 percent to 37.60 euros, following a rally by U.S. rival Cemex SAB de CV, the largest cement maker in the Americas, which yesterday jumped 5.8 percent in New York.
Pfeiffer Vacuum Technology AG soared 10 percent to 76 euros. The company said it plans to acquire Alcatel-Lucent SA’s vacuum technology unit, based in France. The two companies have “largely finalized” negotiations on the purchase, patents and licenses, Pfeiffer said in a statement.
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