German Stocks Advance as Business Confidence Increases
German stocks climbed, with the benchmark DAX (DAX) Index posting its first weekly gain in a month, as a measure of the country’s business confidence unexpectedly increased to a nine-month high in April.
The DAX added 1.2 percent to 6,750.12 at the close of trading in Frankfurt as the gauge advanced 2.5 percent this week. The DAX fell 0.9 percent yesterday as carmakers slid, more Americans than forecast filed claims for unemployment benefits and sales of previously owned houses in the U.S. unexpectedly dropped. The HDAX Index rose 1.1 percent today.
The business-confidence “figures came out strong and were once again able to beat estimates,” Markus Huber, head of German sales trading, at ETX Capital in London wrote in an e- mail today.
The Munich-based Ifo institute said today that its business-climate index, based on a survey of 7,000 executives, rose to 109.9 this month from 109.8 in March. Economists had forecast a drop to 109.5, according to the median of 40 estimates in a Bloomberg News survey.
The German economy, which contracted in the final quarter of last year as the debt crisis damped demand for its goods in Europe, may have avoided a recession. Companies have increased sales to faster-growing markets in Asia, and unemployment at a two-decade low has boosted consumption at home. Investor confidence unexpectedly rose to a two-year high this month, the ZEW Center for European Economic Research said on April 17.
The volume of shares changing hands in companies listed on the DAX was 3.6 percent higher than the 30-day average, according to data compiled by Bloomberg.
The International Monetary Fund’s Managing Director, Christine Lagarde, this week won promises of support from countries including Japan and Denmark as she seeks to increase the fund’s lending resources.
“Countries have to take measures,” Lagarde told Bloomberg Television’s “InBusiness With Margaret Brennan” in Washington. “I am in charge of improving the stability and I need to have the umbrella in case the clouds break into a nasty rain.”
Wincor Nixdorf AG (WIN), a maker of bank machines and cash registers,surged 4.4 percent to 29.56 euros, snapping five days of declines. Deutsche Bank increased its stake in the company to 5.35 percent.
Deutsche Bank and Commerzbank, Germany’s two largest lenders, advanced 1.7 percent to 34.48 euros and 2.3 percent to 1.64 euros respectively as European financial stocks advanced.
Merck KGaA Gains
Merck KGaA (MRK) increased 3.3 percent to 86.45 euros. The company won’t make major acquisitions before 2014, Chief Executive Officer Karl-Ludwig Kley said today in a speech at the company’s annual meeting in Frankfurt. The drug and chemical maker may pursue licensing and targeted purchases, Kley added. He also introduced a strategy through 2018.
Bayer AG rose 2.5 percent to 53.73 euros. The drugmaker said it received approval in Canada for Evergol, a fungicidal seed treatment for oilseed rape.
Hochtief, Germany’s largest construction company, fell 1.6 percent to 42.89 euros, sliding for a third day.
Aixtron SE lost 1.1 percent to 13.09 euros. A gauge of technology-related stocks posted the biggest decline of the 19 industry groups in the Stoxx Europe 600 Index. (SXXP)
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