German Stocks Decline Amid Franco-German Spat; Infineon Falls

German stocks retreated for a fifth day, the longest streak of losses in almost three months, amid a dispute between France and Germany over the European Central Bank’s role in tackling the debt crisis.

Infineon Technologies AG (IFX) and Aixtron SE paced a selloff in European technology shares. SGL Carbon SE (SGL) gained 1.2 percent after Bayerische Motoren Werke AG (BMW) bought a stake in the carbon and graphite products maker.

The benchmark DAX Index lost 0.9 percent to 5,800.24 at the close in Frankfurt. The gauge fell 4.2 percent this week as yields on Italian and Spanish bonds climbed and the cost of insuring against losses on the nations’ debt rose to record levels. The broader HDAX Index also slid 0.9 percent today.

“The only effective emergency relief for markets would be allowing the ECB to do more to solve the debt crisis, which is what more and more market participants are crying out for,” said Ansgar Krekeler, a sales analyst at WGZ-Bank AG in Dusseldorf, Germany. “The DAX Index (DAX) could still fall to a support level of 5,700.”

German Chancellor Angela Merkel yesterday rejected French calls to deploy the ECB as a crisis backstop, defying global leaders and investors calling for more urgent action to halt the turmoil. Merkel listed using the ECB as lender of last resort alongside joint euro-area bonds and a “snappy debt cut” as proposals that won’t work.

ECB council member Jens Weidmann said the ECB can’t be asked to solve the sovereign debt crisis just because governments have so far failed.

Greek Budget

Greece’s new government won approval today for its final 2012 budget designed to regain the confidence of creditors and secure resumption of international financing.

Italian Prime Minister Mario Monti won a final parliamentary confidence vote, granting full power to his new government after pledging to spur growth and reduce debt in the euro-region’s third-largest economy.

German stocks fell even after the index of U.S. leading indicators climbed more than forecast in October, signaling the world’s largest economy will keep growing in early 2012.

Infineon, Europe’s second-biggest semiconductor maker, slumped 2.3 percent to 5.91 euros, while Aixtron, a supplier to the semiconductor industry, slipped 1.2 percent to 9.34 euros. Technology shares were among the worst performers in the Stoxx 600 today, falling 1.6 percent.

ProSiebenSat.1 Media AG (PSM) lost 4.2 percent to 13.41 euros, the lowest since Oct. 5. Germany’s biggest private broadcaster was rated “sell” in new coverage at Banco Espirito Santo SA, which cited margin pressure from increased competition.

TUI, SGL Carbon

TUI AG (TUI1) declined 3 percent to 3.89 euros, the lowest price in more than six weeks. Chief Financial Officer Horst Baier said yesterday that the company will exercise its right to sell its remaining stake in the Hapag-Lloyd AG container-shipping business in January as it couldn’t find a new investor or do an initial public offering.

SGL Carbon gained 1.2 percent to 43.68 euros after BMW, the world’s largest maker of luxury cars, bought a 15 percent stake in the company. BMW didn’t disclose the financial details of the transaction, adding that while it is “satisfied” with its current holding in SGL, it can’t in principle rule out additional share purchases in the future.

Deutsche Boerse AG (DB1) added 2.8 percent to 42.52 euros, the highest price in two months. The operator of the Frankfurt exchange and NYSE Euronext offered to sell overlapping single-equity derivatives businesses and give rivals some access to clearing services to soothe European regulators’ concerns over their proposed merger.

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

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