German Stocks Advance Before EU Decision on Greek Debt Bailout
German stocks rose to a six-month high ahead of a euro-area finance ministers meeting to try to settle terms for a second Greek bailout, and as China cut banks’ reserve requirements.
Banks led gains, with Commerzbank AG increasing 2.9 percent and Deutsche Bank AG (DBK) adding 2.3 percent. BASF SE (BAS) rose 2.4 percent, following advances in European chemical makers. ThyssenKrupp AG, Germany’s largest steelmaker, also climbed.
Germany’s benchmark DAX Index (DAX) gained 1.4 percent to 6,945.55 at 1:58 p.m. in Frankfurt, its highest level since Aug. 1. Of the 30 companies listed on the index, 28 rose and two fell. The broader HDAX advanced 1.4 percent.
Euro-area finance ministers meet in Brussels today to hammer out a deal to prevent the region’s first sovereign default through a bailout for Greece. They will join Greek Prime Minister Lucas Papademos. Discussions will seek to reconcile demands made on Greek leaders, a debt swap among private creditors, the role of the European Central Bank and concerns that austerity will fail.
China cut the amount of cash that banks must set aside as reserves for the second time in three months by 50 basis points effective Feb. 24, according to People’s Bank of China. The cuts are aimed at fueling lending and sustaining economic growth as the housing market cools and Europe’s sovereign debt crisis weighs on exports.
Commerzbank (CBK) rose 2.9 percent to 2.14 euros, while Deutsche Bank gained 2.3 percent to 34.60 euros.
ThyssenKrupp, Germany’s largest steelmaker, climbed 3.3 percent to 21.23 euros, as basic resources companies on the Stoxx Europe 600 rose 1.8 percent.
“The Chinese central bank has lowered the minimum reserves at banks, so that there is hope that the boom will not weaken too strongly; that gain is more due to these things,” said Hans-Peter Wodniok, an analyst at Fairesearch Gmbh & Co.
BASF, the world’s largest chemical manufacturer, rallied 2.4 percent to 64.51 euros, while Stoxx Europe 600 chemical makers advanced 1.7 percent.
Siemens AG increased 1.1 percent to 75.23 euros. The engineering company sold a blocking stake in OAO Power Machines, Russian billionaire Alexey Mordashov’s turbine producer, for no more than $280 million, below the market price, Russia’s Kommersant reported today, citing an unidentified person familiar with the terms of the transaction.
Infineon Technologies AG, Europe’s second-largest semiconductor maker, climbed 3 percent to 7.80 euros. The company is among attractive names on the DAX, according to JPMorgan Chase & Co.
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