German Stocks Slide for Third Day as Daimler, BMW Drop
German stocks fell for a third day, erasing earlier gains, as carmakers declined after the European Commission forecast the region’s economy will shrink this year.
Volkswagen AG (VOW), Daimler AG (DAI) and Bayerische Motoren Werke AG (BMW) slipped more than 1.5 percent. Commerzbank AG (CBK) dropped 6.6 percent after Germany’s second-largest lender said it will ask investors to swap hybrid capital instruments trading below face value for new shares. Deutsche Telekom AG (DTE) slid 3 percent after reporting a loss.
The DAX Index (DAX) retreated 0.5 percent to 6,809.46 at the close of trading in Frankfurt, having earlier climbed as much as 0.9 percent. The measure has still rallied 15 percent this year as U.S. economic data exceeded forecasts and the European Central Bank took action to boost lending. The broader HDAX benchmark also fell 0.5 percent today.
The euro-region economy will contract 0.3 percent in 2012, the European Commission said, abandoning a November forecast of 0.5 percent growth. The downgrade was mainly due to projected contractions of 1.3 percent in Italy and 1 percent in Spain.
In Germany, the Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, climbed to 109.6 from 108.3 in January. That’s the fourth straight gain and the highest reading since July. Economists had predicted an increase to 108.8, according to the median of 38 estimates in a Bloomberg News survey.
U.S. Labor Market
The number of Americans filing first-time claims for unemployment insurance payments held at a four-year low last week. Applications were unchanged in the week ended Feb. 18 at 351,000, the fewest since March 2008, Labor Department figures showed today. The median projection in a Bloomberg News survey called for 355,000 claims.
Volkswagen preferred shares fell 2.3 percent to 139.15 euros, Daimler declined 1.9 percent to 46.93 euros and BMW, the world’s biggest maker of luxury cars, retreated 1.5 percent to 69.89 euros. A gauge of automakers in the Stoxx Europe 600 Index declined 1.9 percent.
Commerzbank dropped 6.6 percent to 1.93 euros after unveiling a plan to increase core Tier 1 capital by more than 1 billion euros ($1.33 billion) by buying back hybrid instruments with new shares. The lender also booked a 700 million-euro writedown on Greek debt in the fourth quarter.
Deutsche Telekom dropped 3 percent to 8.70 euros after reporting a 1.34 billion-euro fourth-quarter net loss because of writedowns on T-Mobile USA and its Greek business. The phone company forecast earnings before interest, taxes, depreciation and amortization will fall by 3.7 percent to 18 billion euros this year.
To contact the reporter on this story: Konstantin Riffler in Frankfurt at kriffler@bloomberg.net
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net
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