Stocks Rise in Germany; Volkswagen Leads Advance on DAX as Porsche Surges
German stocks advanced, with Volkswagen AG leading stocks on the benchmark DAX Index higher.
Volkswagen rose after Porsche SE, the sports-car maker with which it plans to merge, persuaded a U.S. judge to dismiss two lawsuits claiming the company cost hedge funds more than $2 billion by misleading short-sellers in its acquisition of Volkswagen shares in 2008. Also, Volkswagen’s supervisory board unanimously extended Chief Executive Officer Martin Winterkorn’s contract by five years to the end of 2016.
Volkswagen preferred shares, which have replaced its common stock on the DAX, rose 3.3 percent to 125.45 euros, while Porsche’s preferred shares surged 14 percent to 68.15 euros. Competitor Bayerische Motoren Werke AG also rose, with BMW shares gaining 2.7 percent to 60.45 euros.
The DAX increased as much as 1.6 percent in Frankfurt and was up 1.2 percent to 6,999.87 as of 1:10 p.m. local time, heading for the biggest gain since Dec. 2. The broader HDAX Index rose 1.1 percent.
“DAX stocks are rising currently after a smaller than usual trading volume last week lead to a decline,” said Ralf Groenemeyer, an analyst at Sylvia Quandt Research in Frankfurt, in an interview.
Infineon Technologies AG added 2.8 percent to 7.16 euros, as it was reported global semiconductor sales rose 14 percent in November compared with a year earlier. “We expect continued moderation in sales growth, in line with our November forecast,” Brian Toohey, president of the Semiconductor Industry Association, said in a statement.
Deutsche Lufthansa AG gained as the company said it will hire 4,000 employees in Germany this year to deal with greater seating capacity and passenger numbers. The shares rose 2.9 percent to 16.83 euros.
K+S AG rose after the maker of household, industrial and commercial salt products and fertilizers sued Rohm & Haas Co. over the 2009 sale of Morton International, claiming “multiple breaches” of the deal that made the Kassel, Germany-based company the world’s biggest supplier of salt. K+S added 1.6 percent to 57.25 euros.
Stocks in Germany were helped by a report showing Europe’s manufacturing industry grew more than initially estimated in December, powered by Germany’s export-led expansion. A gauge of manufacturing in the country rose to 60.7 in December from 58.1 the previous month, London-based Markit Economics said today. A reading above 50 indicates expansion.
ADVA AG Optical Networking rose 8.9 percent to 6.38 euros after Unicredit analyst Guenther Michael Hollfelder raised his rating to “Hold” from “Sell” on Dec. 1. CeWe Color Holding AG gained after Frankfurter Allgemeine Sonntagszeitung, citing an interview with Chief Financial Officer Olaf Holzkaemper, reported the company will “slightly” raise its dividend for 2010. The stock added 2.1 percent to 34.06 euros.
Can’t Recommend Acceptance
ZhongDe Waste Technology AG rose as the builder of waste incinerators in China said it plans to buy back 56,200 shares to complete a 2009 repurchasing program. The authorization for the plan expires June 28, 2015. The stock added 3.2 percent to 11.90 euros.
Colonia Real Estate AG fell as the management and supervisory boards said they cannot recommend acceptance of the public takeover offer by TAG Immobilien AG. The offer price is “inadequate” from a financial point of view, Colonia said in a statement today. The stock fell 0.7 percent to 5.54 euros.
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