German Stocks Extend Weekly Advance; Commerzbank, Medion Rise

German stocks climbed, with the benchmark DAX (DAX) Index posting a fourth straight weekly advance and closing at the highest level since January 2008.

HeidelbergCement AG (HEI) followed gains in European construction shares, rising 2.6 percent. Medion AG (MDN) surged 7.1 percent after an upgrade by WestLB AG. Aixtron SE sank 4.2 percent as Citigroup Inc. started coverage of the stock with a “sell” recommendation.

The DAX gained 0.3 percent to 7,426.81 at the 5:30 p.m. close in Frankfurt, bringing this week’s advance to 0.8 percent. The index has rallied 7.4 percent this year amid optimism that the global economic recovery is gathering strength. The broader HDAX Index also rose 0.3 percent today.

Finance chiefs from the Group of 20 nations are meeting today and tomorrow in Paris to discuss imbalances that pose a risk to the global economy as a report showed that German producer prices increased at the fastest pace in more than two years last month.

China boosted its banks’ reserve requirement ratio today for the second time this year to counter inflation and curb property-price gains. Reserve ratios will increase by half a percentage point from Feb. 24, the People’s Bank of China said.

‘Volatile few Years’

“We don’t think 2011 is necessarily the year where the inflation consequences are going to aggressively turn markets,” Jim Reid, a strategist at Deutsche Bank AG in London, wrote in a report. “However, the seeds of future troubles are arguably being sown and are setting the scene for a volatile few years ahead.”

HeidelbergCement, the world’s third-largest cement maker, gained 2.6 percent to 52.60 euros. Competitor Lafarge SA said it will merge its cement and ready0mixed concrete businesses in the U.K. with Anglo American Plc, leading gains in construction shares across Europe.

Medion climbed 7.1 percent to 12 euros, the biggest advance since June. The consumer-electronics company was raised to “buy” from “neutral” at WestLB, which said it regards “the current share price level as attractive on unchanged earnings estimates.”

Aixtron, a maker of equipment used to produce light-emitting diode screens, tumbled 4.2 percent to 30.65 euros as Citigroup recommended selling the shares, citing a risk to China orders.

To contact the reporter on this story: 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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