German Stocks Climb; DAX Index Posts Best Weekly Rally Since May

German stocks rose, with the benchmark DAX Index (DAX) posting its biggest weekly increase in 10 months, as SAP AG (SAP) rallied after Oracle Corp. (ORCL) boosted its forecast.

SAP climbed 1.9 percent as rival Oracle forecast profit that beat analysts’ estimates and HSBC Holdings Plc advised buying the shares. BASF SE (BAS) gained as two people with knowledge of the matter said the world’s biggest chemical company is in talks with potential buyers of its fertilizer units.

The DAX rose 12.78, or 0.2 percent, to 6,946.36 at the 5:30 p.m. close in Frankfurt, extending this week’s rally to 4.2 percent. The measure has gained 6.6 percent from this year’s low on March 16 as investors speculated that the 12 percent slump from Feb. 18 left German equities undervalued. The broader HDAX Index (HDAX) gained 0.2 percent today.

“Equity markets edged higher today, capping an impressive weekly rebound, choosing to focus on broker upgrades and upbeat company results, and set aside concerns about Japan’s nuclear reactors, as well as spreading unrest across the Middle East,” Michael Hewson, a market analyst at CMC Markets in London, wrote in an e-mail.

German business confidence fell from a record high in March. The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, declined to 111.1 from 111.3 in February, which was the highest reading since records for a reunified Germany began in 1991. Economists had predicted a drop to 110.5, according to the median of 39 forecasts in a Bloomberg News survey.

SAP Extends Gain

SAP extended yesterday’s 2.8 percent gain, giving it the biggest two-day advance since July 2009. Rival Oracle yesterday forecast profit excluding acquisition costs and some other expenses of 69 cents to 73 cents this quarter, surpassing the 66-cent average estimate of analysts surveyed by Bloomberg. Oracle also posted earnings on the same basis of 54 cents a share in the quarter that ended Feb. 28, exceeding analysts’ projections.

Separately, HSBC upgraded SAP shares to “overweight” from “neutral” today.

BASF gained 1.1 percent to 59.03 euros. The German company, based in Ludwigshafen, said earlier this month that it would seek to sell the fertilizer businesses, which generate about 500 million euros ($703 million) in combined sales.

Gildemeister AG (GIL) rallied 7 percent to 16.78 euros after the machine-tool manufacturer said it will implement the previously announced increase of its share capital, with the new shares offered to shareholders for subscription at a 5:1 ratio.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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