German Stocks Pare Biggest Monthly Gain in 2 1/2 Years; Banks Decline
German stocks declined, paring the biggest monthly gain since April 2009, as investors waited for European leaders to detail how they will find the money to expand the region’s bailout fund.
ThyssenKrupp AG (TKA), Germany’s largest steelmaker, fell 6.5 percent as UBS AG cut its recommendation on the shares. Deutsche Bank AG (DBK) and Commerzbank AG (CBK), Germany’s biggest lenders, slipped more than 8 percent.
The benchmark DAX Index (DAX) declined 3.2 percent to 6,141.34 at the close in Frankfurt. The measure advanced for five consecutive weeks through Oct. 28 on growing speculation that European leaders will shore up banks’ balance sheets and insulate other euro economies from a possible Greek default. The DAX has risen 21 percent from this year’s low on Sept. 12. The gauge gained 12 percent in October. The broader HDAX Index retreated 3.1 percent today.
“It’s no surprise markets are taking a breather after the climb,” Mikkel Petersen, a senior equity adviser at Nordea Private Banking in Copenhagen, wrote in a note to clients.
Italian, Spanish and Belgian bonds declined today as concern mounted that the euro area’s plan won’t halt the spread of the region’s debt crisis from Greece.
“What may cause more uncertainty in the marketplace are Italian government bond yields, as the 10-year yield has climbed above 6 percent,” Petersen said. “That is a sign of danger which we’re watching.”
ThyssenKrupp dropped 6.5 percent to 20.86 euros after UBS cut its recommendation on the shares to “neutral” from “buy.” UBS said other companies offer better value over the next year, even though ThyssenKrupp has the “best long-term story.” Salzgitter AG (SZG), the second-biggest German steelmaker, retreated 6 percent to 40.94 euros.
Deutsche Bank declined 8.6 percent to 30.35 euros and Commerzbank slid 8.5 percent to 1.78 euros, as a gauge of bank shares on the Stoxx Europe 600 Index was among the worst performers in the measure’s 19 industry groups. Deutsche Bank Trust Co. is one of the largest unsecured creditors to MF Global Holdings Ltd., which filed for bankruptcy today after making bets on European sovereign debt.
Bayerische Motoren Werke AG (BMW) declined 4.5 percent to 59.06 euros and Daimler AG (DAI) slipped 5.6 percent to 37 euros respectively, after Handelsblatt reported carmakers this month offered the biggest discounts on new cars in Germany in five years.
Deutsche Boerse AG retreated 3.4 percent to 40.10 euros. The company and NYSE Euronext have until Nov. 17 to offer concessions that may appease the concerns of European Union regulators over their bid to combine, three people familiar with the situation said.
Nordex SE (NDX1), the wind turbine maker, dropped 0.7 percent to 4.49 euros after Vestas Wind Systems A/S cut its profit margin and revenue projections for the full year, citing production delays in Germany.
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