German Stocks Decline After Greek Poll; Commerzbank Falls
German stocks declined as a poll showed Greece’s biggest anti-bailout party leading its rivals, euro-area confidence fell more than forecast, and Spain’s default risk rose to a record.
Bayerische Motoren Werke AG (BMW), the largest maker of luxury cars, fell 3.1 percent. Volkswagen AG (VOW) retreated 2.9 percent. Deutsche Bank AG (DBK) and Commerzbank AG (CBK), Germany’s largest lenders, resumed losses after earlier rallying.
The DAX Index (DAX) declined 1.8 percent to 6,280.8 at the close of trading in Frankfurt. The gauge has fallen 7.1 percent this month, on course for the biggest drop since August, amid growing concern that Greece will fail to implement agreed austerity measures and leave the euro area, and as Spanish banks seek government bailouts. The wider HDAX also fell 1.8 percent today.
“The German economy is in good shape but there is a bad picture from the European debt crisis and problems with Spanish banks,” said Robert Halver, head of capital markets research at Baader Bank AG. “There is a high level of uncertainty and nervousness. There is talk but no action.”
Syriza scored 30 percent in voter preferences, according to the VPRC poll for Epikaira magazine, said a spokesman for the publication, who declined to be named. New Democracy, which supported austerity measures in return for international funds, received 26.5 percent while socialist Pasok was polling 12.5 percent, according to the spokesman.
“Volumes are low and everything is very headline driven and reactive to positive or negative news, rather than being stock or fundamental specific,” said Betsy Anderson, a fund manager at Ignis Asset Management in Glasgow.
The number of shares changing hands in DAX-listed companies today was 4.6 percent below the average over the past 30 days, according to data compiled by Bloomberg.
Economic confidence in the euro area declined more than economists forecast this month to the lowest in 2 1/2 years after inconclusive elections in Greece on May 6 raised the specter of a euro breakup.
An index of executive and consumer sentiment fell to 90.6 from a revised 92.9 in April, the European Commission in Brussels said today. That’s the lowest since October 2009 and below the 91.9 forecast by economists, according to the median of 28 estimates in a Bloomberg survey.
The cost of insuring against default on Spanish sovereign bonds rose to a record as the nation’s debt crisis deepened amid concern over bank bailouts. Credit-default swaps linked to the nation’s debt climbed 29 basis points to 589.5 at 5:27 p.m. in Frankfurt, according to data compiled by Bloomberg.
Spain’s sovereign-credit rating was cut by Egan-Jones Ratings Co. to B from BB- on the country’s deteriorating economic outlook
The European Commission, the European Union’s central regulator, sided with Spain in proposing that the euro’s permanent bailout fund inject cash to banks instead of channeling the money via national governments. The use of the rescue fund to recapitalize banks “might be envisaged” and would “sever the link between banks and the sovereigns,” the commission said in policy recommendations released today in Brussels.
U.S. Home Sales
The number of Americans signing contracts to buy previously owned homes fell in April by the most in a year, indicating the U.S. housing recovery remains uneven.
The index of pending home resales dropped 5.5 percent following a revised 3.8 percent gain the prior month, figures from the National Association of Realtors showed today in Washington. The median forecast of 42 economists surveyed by Bloomberg News called for no change in the measure.
BMW dropped 3.1 percent to 62.01 euros. Preferred shares of Volkswagen, the world’s second-biggest carmaker, fell 2.9 percent to 130.55 euros. Daimler retreated 2.5 percent to 37.95 euros. A gauge of automakers was the second-worst performer of the 19 industry groups in the Stoxx Europe 600 Index.
Deutsche Bank and Commerzbank erased earlier gains, declining 1.4 percent to 28.83 euros, and 1.7 percent to 1.33 euros, respectively.
ThyssenKrupp AG (TKA), Germany’s largest steelmaker, fell 3.3 percent to 13.88 euros.
BASF SE (BAS) retreated 2 percent to 56.79 euros. The world’s biggest chemical maker is not seeing the dynamism it expected in Asia and is considering a partnership in India, Frankfurter Allgemeine Zeitung reported, citing an interview with the deputy chief executive officer, Martin Brudermueller.
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