German Stocks Rise as Top Court Clears Way for ESM

German stocks advanced as the top constitutional court cleared the way for the country to ratify the euro-area bailout fund, while imposing some conditions on its implementation.

Commerzbank AG (CBK), Germany’s second biggest lender, surged 7.2 percent. Fraport AG jumped 5.4 percent as Frankfurt aircraft movements rose in August. Deutsche Lufthansa AG climbed 1.6 percent.

The DAX Index (DAX) added 0.5 percent to 7,343.53 at the close of trading in Frankfurt, after earlier rising as much as 1.4 percent. The gauge has risen 23 percent from this year’s low on June 5 as European Central Bank President Mario Draghi pledged to preserve the euro and speculation grew the U.S. Federal Reserve will announce further stimulus. The broader HDAX Index rose 0.4 percent today.

“It was very important for our court to say yes to the ESM,” said Robert Halver, head of capital markets research at Baader Bank AG in Frankfurt. “A way for getting rid of the European crisis is definitely available and the markets are responding to this. The ECB will help find euro-land a way through in the same way as central banks have in the U.S., Japan and the U.K.”

The Federal Constitutional Court in Karlsruhe today dismissed motions filed by groups including a conservative lawmaker and an opposition political party that sought to block the 500 billion-euro ($644 billion) fund, known as the European Stability Mechanism, and a deficit-control treaty championed by Chancellor Angela Merkel.

The court also stipulated that a cap of about 190 billion euros be set on German liabilities before ESM ratification, unless parliament decides to back extra funds.

Commerzbank jumped 7.2 percent to 1.58 euros. A gauge of European lenders was the best performer of the 19 industry groups on the Stoxx Europe 600 Index. (SXXP)

Fraport Traffic

Fraport gained 5.4 percent to 47.29 euros as Frankfurt airport aircraft movements rose 1.2 percent in August. The increase would have been 1.8 percent without the strike-related cancellation of 251 flights, the company said in a statement.

Lufthansa climbed 1.6 percent to 10.83 euros. Europe’s second-biggest airline has completed its initial Swiss, Austrian and Brussels Airlines integrations, freeing up resources for it to look at other targets, according to Copenhagen-based newspaper Berlingske, which cited an interview with Goetz Ahmelmann, Lufthansa’s vice president for alliances, strategy and subsidiaries.

Grammer Order

Grammer AG, a German maker of seats for cars, buses and tractors, gained 5.6 percent to 16 euros after winning an order from Deutsche Bahn AG for 46,000 train seats.

Salzgitter AG (SZG), Germany’s second-biggest steelmaker, surged 5.3 percent to 33.76 euros as the stock was raised to buy from neutral at MainFirst Bank AG.

Wacker Chemie AG (WCH) fell 3.3 percent to 53.20 euros. The German maker of polysilicon was the biggest decliner on the Stoxx 600 Chemicals Index.

Xing AG, the German professional networking provider, slid 3.3 percent to 34.40 euros as the stock was cut to neutral from overweight by JPMorgan Chase & Co., which set a price forecast of 41 euros per share.

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

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.