German Stocks Drop, Led by BASF, on Concern Economy Is Cooling

German stocks (SXXP) dropped, trimming the DAX (DAX) Index’s third straight weekly advance, as the biggest drop in factory orders in almost three years added to concern Europe’s debt crisis is cooling the economy.

BASF SE (BAS) and Bayer AG (BAYN) declined as companies most dependent on economic growth retreated. Deutsche Bank AG (DBK), the nation’s biggest lender, fell for a third day.

The DAX slipped 0.6 percent to 6,057.92 at the close in Frankfurt, having earlier advanced as much as 0.9 percent. The decline trimmed this week’s advance to 2.7 percent. The wider HDAX Index dropped 0.5 percent today.

The DAX has increased (DAX) 19 percent from last year’s lowest level on Sept. 12 as U.S. economic data showed the recovery is gathering pace and optimism grew that euro-area policy makers will contain the region’s debt crisis. The gauge is still 20 percent below its 2011 high as borrowing costs from Spain to Italy jumped, raising concern the European Union will have to bail out more countries.

“The improvement in the U.S. economic momentum is good news,” said Marc Renaud, who helps oversee 1.5 billion euros ($1.9 billion) at Mandarine Gestion in Paris. “Unfortunately, nothing has changed” with regards to Europe’s debt crisis.

European Central Bank Governing Council member Klaas Knot said last night Germany should support increasing the euro area’s bailout fund to help end the debt crisis.

Factory Orders

German factory orders (GEIOYY), adjusted for seasonal swings and inflation, sank 4.8 percent in November, the Economy Ministry in Berlin said today. Economists had forecast a decline of 1.8 percent, according to the median of 25 estimates in a Bloomberg News survey.

BASF, the world’s largest chemical maker, dropped 1.5 percent to 55.92 euros. Bayer declined 1 percent to 51.77 euros. Daimler AG (DAI), maker of the Mercedes Benz cars, dropped 1.1 percent to 36.47 euros.

The U.S. economy added 200,000 jobs last month, Labor Department figures showed in Washington. The median projection in a Bloomberg News survey called for a December gain of 155,000. The unemployment rate unexpectedly fell to 8.5 percent, the lowest since February 2009, while hours worked and earnings climbed.

Some strategists said the report was inflated by temporary activity stemming from Thanksgiving and Christmas.

Return of Gifts

“There was a lot of activity within the transport and warehouses that recent reports indicate may be due to the record returns of holiday gifts back to U.S. retailers,” said Ioan Smith, a director at Knight Capital Europe Ltd. in London. “It is likely that all this gain that we’ve got will drop out of the numbers at some stage again.”

Deutsche Bank fell 3.5 percent to 27 euros, taking its retreat in the past three days to 12 percent. UniCredit SpA plunged 11 percent in Milan trading, bringing its decline to 37 percent since Italy’s biggest lender priced a 7.5 billion-euro ($9.6 billion) rights offer at a discount. Concern more banks will have to tap markets for money sent the Stoxx 600 Banks Index (SX7P) down 2.7 percent this week.

K+S AG (SDF), Europe’s biggest producer of potash, climbed 1.7 percent to 36.71 euros. Monsanto Co., the world’s largest seed company, yesterday reported fiscal first-quarter profit that exceeded analysts’ estimates as sales rose in Latin America.

Fraport AG (FRA), operator of the Frankfurt airport, rose 3.5 percent to 40.07 euros, the largest advance since Nov. 30. Equinet AG raised its recommendation on the shares to “buy” from “accumulate,” adding that the company is likely to post “significant” growth in sales and earnings in coming years.

To contact the reporters on this story: Adam Haigh in London at ahaigh1@bloomberg.net; Alexis Xydias in London at axydias@bloomberg.net

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

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