German stocks climbed as China said it’s supporting efforts to ensure financial stability in the European Union and GfK AG said Germany’s consumer confidence will stay close to the highest level in more than three years.
ThyssenKrupp AG (TKA) followed an increase in metal prices. Volkswagen AG (VOW), Europe’s largest carmaker, and Daimler AG (DAI), the world’s second-biggest maker of luxury cars, led automobile companies higher. GEA Group AG (G1A) surged as BofA Merrill Lynch Global Research recommended buying the shares. K+S AG (SDF), TUI AG (TUI1) and Pfleiderer AG advanced as the stocks were upgraded at Bankhaus Lampe KG.
The benchmark DAX Index gained 0.9 percent to 7,077.99 at the 5:30 p.m. close in Frankfurt, rising for a second day. The measure has climbed 19 percent this year as corporate profits increased, the Federal Reserve unveiled a $600 billion bond-purchase program to assist the U.S. economy’s recovery and the European Union bailed out Greece and Ireland. The broader HDAX Index (HDAX) also rallied 0.9 percent today.
“We’ll see a good year for equities next year,” said Markus Wallner, a senior equity strategist at Commerzbank AG in Frankfurt. “The economy is getting better, though the European sovereign-debt crisis will remain a problem that will cause a bit of volatility next year. Things are quiet at the moment as most fund managers have closed their positions.”
German stocks continued their rally even after Moody’s Investors Service placed Portugal’s A1 long-term and Prime-1 short-term government bond ratings on review for a possible downgrade.
China supports the International Monetary Fund’s measures and “has taken concrete action to help some EU members counter the sovereign-debt crisis,” Vice Premier Wang Qishan said at the start of the Third EU-China High-Level Economic & Trade Dialogue, a one-day forum in Beijing to discuss economic and trade relations.
GfK, the Nuremberg-based market research company, said today that its consumer sentiment index, based on a survey of about 2,000 people, will slip to 5.4 from 5.5 in December. That was the highest since October 2007.
ThyssenKrupp, Germany’s largest steelmaker, advanced 1.5 percent to 32 euros as aluminum, copper, lead, nickel and tin all climbed on the London Metal Exchange.
Volkswagen preferred shares rose 2.3 percent to 129.15 euros. The carmaker will start assembling Passat sedans in Malaysia by the end of 2011 and plans to build more models in the southeast Asian country as the company challenge to Toyota Motor Corp.
Daimler added 1.5 percent to 54.66 euros, while Bayerische Motoren Werke AG (BMW) gained 2.6 percent to 64.80 euros. Automobile shares were among the best performers in the benchmark Stoxx Europe 600 Index, rising 1.8 percent as a group.
Continental AG jumped 2 percent to 60.60 euros. The tiremaker has dropped its plan to merge with its majority shareholder Schaeffler Group, Manager-Magazin reported, citing unidentified people with knowledge of the situation. Continental’s management board is weighing possibilities under which Schaeffler’s stake in the company would be reduced over the long term, the report said.
GEA Group, whose machines milk about one-third of the world’s dairy cows, climbed 3.1 percent to 21.56 euros as BofA Merrill Lynch upgraded the stock to “buy.”
K+S increased 1.4 percent to 56.65 euros as Bankhaus Lampe recommended buying shares of Europe’s biggest potash producer.
TUI rallied 5.1 percent to 10.49 euros after the German owner of Europe’s largest travel company was raised to “hold” from “sell” at Lampe. The bank also upgraded Pfleiderer to “hold” from “sell.” The maker of laminate flooring surged 5.3 percent to 2.56 euros.