German Stocks Rise, Snapping Five Days of Losses

German stocks advanced, rebounding from the biggest weekly drop of the year, as Chinese Premier Wen Jiabao pledged to focus more on bolstering growth and Group of Eight leaders pushed for Greece to stay in the euro area.

Software AG (SOW) and Infineon Technologies AG (IFX) led technology shares higher. Merck KGaA (MRK) and ThyssenKrupp AG (TKA) rallied at least 2.5 percent after UBS AG upgraded its recommendations on the shares.

The DAX (DAX) Index climbed 1 percent to 6,331.04 at the close of trading in Frankfurt. The benchmark gauge retreated 4.7 percent last week, the largest drop since Dec. 16, amid growing concern that Greece will be pushed out of the euro. The broader HDAX Index also rose 1 percent today.

“It feels like a relief rally from oversold levels and confidence in seeing G-8 leaders all in similar tune,” said Daniel Weston, a portfolio adviser at Schroeder Equities GmbH in Munich. “The comments from Wen Jiabao were certainly nice to hear, but the euro story is still the main game in driving markets.”

Faced with differences between Europe and the U.S., and among European governments over the crisis response, the eight leading industrial economies concurred at President Barack Obama’s retreat outside Washington “that the right measures are not the same for each of us.”

German Finance Minister Wolfgang Schaeuble will for the first time discuss the euro at a meeting with his newly installed French counterpart, Pierre Moscovici, in Berlin today as European Union leaders prepare for a summit in Brussels on May 23.

Merkel, Hollande

After three shorter meetings in the last week, German Chancellor Angela Merkel and French President Francois Hollande will seek to balance France’s desire to jump-start growth with Germany’s preference for spending cuts.

In China, Wen called for “putting stabilizing growth in a more important position” and didn’t mention concern about inflation in remarks published yesterday by the official Xinhua News Agency. China may announce stimulus actions in the near term, according to a front-page commentary today in the China Securities Journal, published by Xinhua.

Spain’s government revised up its 2011 budget deficit to 8.9 percent of gross domestic product, even as its borrowing costs approached levels that prompted bailouts in Greece, Ireland and Portugal.

Software, Infineon

Software, Germany’s second-largest software maker, added 3.4 percent to 24.07 euros. Infineon Technologies, Europe’s second-largest semiconductor maker, gained 2.1 percent to 6.33 euros. A gauge of technology companies was among best performers of 19 industry groups in the Stoxx Europe 600 Index.

Preferred shares of Volkswagen AG (VOW), the world’s second- biggest carmaker, gained 1 percent to 129.45 euros, rebounding from a three-week low. Bayerische Motoren Werke AG (BMW), the largest maker of luxury vehicles, increased 0.8 percent to 61.77 euros.

MAN SE, the German truckmaker controlled by Volkswagen, added 2.8 percent to 80.39 euros.

Merck rose 2.8 percent to 76.04 euros, snapping five days of declines, as UBS upgraded the German drugmaker to buy from neutral. ThyssenKrupp added 2.6 percent to 15.27 euros after the brokerage raised Germany’s biggest steelmaker to neutral from sell.

Kabel Deutschland Holding AG (KD8) gained 2.9 percent to 47.51 euros. Germany’s biggest cable company agreed to acquire Tele Columbus Group, the German cable television provider owned by creditors after restructuring its debt, for 603 million euros ($770 million) plus accrued interest to expand coverage of the country’s pay-television households.

Bayer AG (BAYN) advanced 2.2 percent to 51.77 euros. The outlook on the company’s long-term issuer default rating was raised to positive from stable at Fitch Ratings, which cited “improved operational and financial positioning.”

Metro AG, Germany’s largest retailer, added 3.2 percent to 24 euros.

Solarworld AG (SWV), the biggest German maker of solar panels, declined 7.8 percent to 1.50 euros after surging 6.5 percent on May 18.

To contact the reporter on this story: Tom Stoukas in Athens at astoukas@bloomberg.net

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

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