German Stocks Climb; Merck, ThyssenKrupp Shares Advance

German stocks advanced as U.K. retail sales unexpectedly increased in July, outweighing a report that showed foreign direct investment into China plunged to the lowest level in two years.

Merck KGaA advanced 3.6 percent. Constantin Medien AG (EV4) added 0.9 percent after posting second-quarter profit and confirming its 2012 revenue forecast. ThyssenKrupp AG (TKA), climbed 1.9 percent as a gauge of raw-material producers was among the best performer on the Stoxx Europe 600 Index.

The DAX Index (DAX) gained 0.7 percent to 6,996.29 at the close of trade in Frankfurt. The benchmark measure has rallied 17 percent from this year’s low on June 5 as central banks around the world took steps to bolster economic growth. The broader HDAX Index also added 0.7 percent today.

“Many asset managers are still buying German equities because it is difficult to find alternatives,” said Robert Halver, head of capital markets research at Baader Bank AG in Frankfurt. “Germany remains the last anchor of stability in the euro zone and has a wonderful industrial culture. There is no deep angst about the economy losing momentum.”

In the U.K., retail sales including auto fuel rose 0.3 percent from June, the Office for National Statistics said. The median forecast of 22 economists in a Bloomberg News survey was for a 0.1 percent decline. Sales in June were revised to a 0.8 percent gain from 0.1 percent, which means second-quarter sales fell 0.3 percent, less than initially estimated. Excluding fuel, sales were unchanged in July from the previous month.

In China, FDI declined 8.7 percent from a year earlier to $7.58 billion, the eighth drop in nine months and the smallest inflow since July 2010. The Ministry of Commerce released the data at a briefing in Beijing today.

Stimulus Optimism

Premier Wen Jiabao said there’s “growing room for monetary policy operation,” state television reported yesterday, boosting optimism China will increase stimulus measures.

In the U.S., house building dropped more than economists had predicted, a Commerce Department report showed. Builders broke ground on 746,000 properties at an annual rate, a drop of 1.1 percent from June. That missed the 756,000 median estimate of economists in a Bloomberg survey.

A Labor Department report showed jobless claims rose to 366,000 last week from a revised 364,000 a week earlier. The median forecast of economists in a Bloomberg News survey had called for an increase to 365,000.

A Federal Reserve Bank of Philadelphia report showed that manufacturing in its region shrank more than economists had forecast. The index climbed to minus 7.1 in August from minus 12.9 in July. The Bloomberg survey median had called for a reading of minus 5. Figures less than zero indicate contraction.

Merck, Constantin

Merck, the maker of the Erbitux cancer drug, added 3.6 percent to 89.70 euros for the best performance on the DAX.

Constantin Medien gained 0.9 percent to 1.37 euros after posting a profit in the second quarter and the first half. The company also reiterated its 2012 sales forecast of as much as 480 million euros.

ThyssenKrupp, Germany’s largest steelmaker, advanced 1.9 percent to 16.07 euros. A gauge of raw-material producers was the fourth-best performer on the Stoxx Europe 600 Index, rebounding from yesterday’s 2.1 percent drop.

HeidelbergCement AG (HEI) added 1.9 percent to 40.23 euros after Sueddeutsche Zeitung cited Chairman Bernd Scheifele as saying he wants to cut the company’s debt by half to 7 billion euros.

Infineon Technologies AG (IFX), Europe’s second-largest semiconductor maker, rallied 1.2 percent to 5.98 euros.

To contact the reporter on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net

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

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