German Stocks Advance; Deutsche Bank, Commerzbank, Infineon Shares Rally

German stocks advanced for the first time in four days amid speculation policy makers are examining measures to protect banks from the sovereign-debt crisis.

Deutsche Bank AG (DBK) and Allianz SE rose more than 7 percent. Infineon Technologies AG (IFX) climbed 5 percent after ING Groep NV recommended buying the stock. Xing AG surged 11 percent after Commerzbank AG (CBK) initiated coverage of the company’s shares with a “buy” recommendation.

The benchmark DAX Index (DAX) advanced 256.32, or 4.9 percent, to 5,473.03 at the 5:30 p.m. close in Frankfurt. The gauge has still retreated 27 percent since this year’s high on May 2 and is trading at about 8.5 times the estimated earnings of its companies, near the lowest since 2008, according to Bloomberg data. The broader HDAX Index rallied 4.7 percent today.

The Financial Times quoted Olli Rehn, the European Union’s commissioner for economic affairs, as saying there’s an “increasingly shared view” that the region needs a coordinated approach to halt the debt crisis.

“Investors were able to snap up bargains after European governments announced that they may recapitalize the region’s banks, which led to a rebound in the banking sector,” said Anita Paluch, senior sales trader at Gekko Global Markets Ltd. in London.

$1 Trillion Firepower

European Central Bank governing council member, Christian Noyer, said that the European Financial Stability Facility, together with support from the International Monetary Fund, has effective firepower of $1 trillion.

“The fund will be operational in several days,” Noyer said today on Europe 1 radio. The fund has “440 billion euros ($587 billion), that means in practice, together with IMF support, $1 trillion. It’s a very significant amount.”

The IMF renewed its call for the ECB to step up its response to the region’s debt crisis. The central bank “should lower its policy rate if downside risks to growth and inflation persist,” the IMF said in its biannual regional economic outlook for Europe. “The ECB might need to reinstate some of its longer-term liquidity provision operations if stresses on interbank markets intensify further” and make an “explicit commitment” to buy government bonds “for as long as necessary,” the IMF said.

In the U.S., a report from ADP Employer Services showed companies added 91,000 jobs in September, beating the average estimate of 75,000 workers in a Bloomberg survey of economists. The release came two days before the Labor Department’s employment report for September, which economists’ predict will show an increase of 60,000 jobs in the world’s largest economy.

Banks Advance

Deutsche Bank, Germany’s biggest bank, surged 7.6 percent to 26.50 euros, while Allianz, the country’s largest insurer, soared 7.3 percent to 71.79 euros.

Commerzbank, Germany’s second-biggest lender, advanced 5.4 percent to 1.78 euros after Chief Executive Officer Martin Blessing said the bank is “committed” to deliver on its 2012 targets.

Infineon rose 5 percent to 5.47 euros, ending its longest falling streak in almost two months. Europe’s second-largest chipmaker was raised to “buy” from “hold” at ING.

Evotec AG (EVT) surged 5.5 percent to 2.24 euros as the drug research company agreed to a second multiyear, multitarget drug discovery cooperation with UCB SA in the field of immunology. Evotec will identify small molecules against a selected number of targets.

Xing jumped 11 percent to 53.84 euros, its biggest gain since March 2009, after Commerzbank rated shares of the professional networking site to “buy” in new coverage, saying it could become a bid target for competitors trying to get into German, Austrian and Swiss markets.

ProSiebenSat.1 Media AG (PSM) rose 5.7 percent to 13 euros after Chief Executive Officer Thomas Ebeling said the company will seek “fairly valued” targets for acquisitions. The company will only make acquisitions in the digital-entertainment area that require “low cash investments,” Ebeling said.

To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net

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