German Stocks Rise; Deutsche Bank, Commerzbank, Software AG Gain
German stocks rose for a second day, led by banks, after Portugal’s borrowing costs fell at a sale of 10-year bonds and a report showed the German economy grew at the fastest pace in two decades.
Commerzbank AG and Deutsche Bank AG, the nation’s largest banks, both gained more than 4 percent. Software AG advanced 1.5 percent after saying 2010 revenue and net income was at the upper end of its forecast, aided by demand from the financial industry and the public sector.
The benchmark DAX Index rose 127.21, or 1.8 percent, to 7,068.78 at the 5:30 p.m. close in Frankfurt, bringing this year’s advance to 2.2 percent. The gauge surged 16 percent in 2010 as corporate profits climbed, the Federal Reserve started a second round of asset purchases to boost the U.S.’s economic recovery and the European Union bailed out Greece and Ireland. The broader HDAX Index also gained 1.8 percent today.
“The Portuguese bond sale is very positive and is driving markets up,” said Robert Halver, head of research at Baader Bank AG in Frankfurt. “There’s massive help worldwide to help us get out of the European debt crisis. We also had very good German economic growth figures this morning.”
Portugal sold 599 million euros ($782.5 million) of bonds due in 2020 at an average yield of 6.716 percent, compared with a yield of 6.806 percent at an auction on Nov. 10. It was the first bond sale by any of the euro region’s most indebted countries this year.
Portugal Aid
European governments are considering aid for Portugal, debt buybacks, lower interest rates on rescue loans and guarantees against excessive debt as part of a package to quell the financial crisis, according to two people with direct knowledge of the talks.
The plan, which may include a loan to Portugal of about 60 billion euros and purchases of outstanding Greek debt, would mark an attempt to contain the crisis that has frustrated unprecedented efforts by policy makers to calm markets and raised questions about the health of the 17-nation euro economy.
In addition, Japan said it may extend purchases of bonds sold by a European financial aid fund in coming months to support the region’s recovery from the sovereign-debt crisis, according to two government officials familiar with the matter.
German Growth
Separately, Germany’s gross domestic product jumped 3.6 percent in 2010, the most since data for a reunified Germany began in 1992, after slumping 4.7 percent in 2009, the Federal Statistics Office in Wiesbaden said today. The figure was in line with the median forecast in a Bloomberg News survey of 28 economists. GDP probably rose 0.5 percent in the fourth quarter from the third, the statistics office said. The official fourth- quarter report is due on Feb. 15.
Commerzbank rose 5.3 percent to 5.64 euros, the biggest jump in eight months, and Deutsche Bank advanced 4.3 percent to 42.24 euros. Banking shares posted the best performance among 19 industry groups in the Stoxx Europe 600 Index.
Software AG advanced 1.5 percent to 108.95 euros. Germany’s second-largest maker of business software said sales rose about 30 percent from 847.4 million euros in the previous year and net income was 19 percent to 20 percent higher than the 140.8 million euros reported in 2009. The average estimate of 25 analysts polled by Bloomberg was for sales of 1.1 billion euros and net profit of 176 million euros.
Sky Deutschland AG soared 31 percent to 2.41 euros, the biggest climb since November 2008. The German pay-television operator controlled by Rupert Murdoch’s News Corp. said it reached an agreement with its parent company to raise 400 million euros in financing, more than the 340 million euros it had previously sought.
To contact the reporters on this story: Jack Jordan in London at jjordan22@bloomberg.net; Julie Cruz in Frankfurt at jcruz6@bloomberg.net.
To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net.
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