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German Stocks Rise as Business Confidence Beats Forecasts

German stocks rose, with the benchmark DAX (DAX) Index climbing to its highest in nearly five years as business confidence increased in December more than expected.

HeidelbergCement AG (HEI) gained 3.6 percent as a gauge of construction companies advanced after Deutsche Bank AG reiterated its positive industry outlook. SAP AG (SAP) rose after rival Oracle Corp. posted fiscal second-quarter sales and profit that exceeded analysts’ estimates. ThyssenKrupp AG (TKA) advanced 2.2 percent as Credit Suisse Group AG upgraded the stock.

The DAX added 0.3 percent to 7,672.84 at 10:41 a.m. in Frankfurt, its highest level since January 2008. The gauge has rallied 29 percent from its low on June 5 as European Central Bank policy makers agreed on an unlimited bond-purchase program and the Federal Reserve announced a third round of quantitative easing. The broader HDAX Index rose 0.3 percent today.

The Ifo institute’s business climate index, based on a survey of 7,000 executives, climbed to 102.4 from 101.4 in November. That’s the second straight increase after sentiment dropped to a 2 1/2 year low in October. Economists predicted a gain to 102, according to the median forecast of 43 economists in a Bloomberg News survey.

In the U.S., a Commerce Department report at 8:30 a.m. in Washington may show that housing starts fell to an 872,000 annual rate in November after reaching a four-year high 894,000 rate in October, according to the median forecast of 85 economists. Building permits, a proxy for future construction, probably rose to an 875,000 annual pace.

Construction Gains

HeidelbergCement, the world’s third-largest maker of the building material, gained 3.6 percent to 45.64 euros. A gauge of construction stocks rose the second most among the 19 industry groups in the Stoxx Europe 600 Index. (SXXP)

Deutsche Bank reiterated its positive stance on building stocks, including HeidelbergCement, citing increased investor confidence in a turnaround, cost savings and strong balance sheets.

SAP, the largest maker of enterprise software, advanced 0.7 percent to 61.10 euros after Oracle reported profit excluding some items of 64 cents a shares and adjusted revenue of $9.11 billion. That beat the average analyst estimates for profit of 61 cents and sales of $9.02 billion, according to data compiled by Bloomberg.

ThyssenKrupp added 2.2 percent to 18.54 euros. Credit Suisse upgraded the stock to outperform, the equivalent of a buy rating, from neutral, saying the planned disposal of its Americas unit will remove a loss-making business and substantially change the steelmaker’s long-term outlook.

The company’s management is focused on engineering which will bolster its business model, according to Credit Suisse.

Merck KGaA (MRK) sank 3.3 percent to 98.25 euros as its experimental drug L-BLP25 missed the main goal of a trial in lung cancer patients, denting the company’s ambitions of turning the medicine into a $1 billion-a-year product.

The drug, formerly known as Stimuvax, failed to improve patient survival significantly in the late-stage trial of more than 1,500 patients known as Start, Darmstadt, Germany-based Merck said today in a statement.

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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