German Stocks Rise as Optimism After Alcoa Offsets Output

German stocks climbed as Alcoa Inc. kicked off the U.S. earnings season with better-than-expected sales, offsetting data that showed German industrial production rose less than forecast in November.

Deutsche Bank AG (DBK) and Commerzbank AG (CBK), Germany’s largest lenders, followed a gauge of European banks higher. Deutsche Telekom AG increased 3.4 percent, its biggest gain since August. Lanxess AG (LXS) dropped 2.2 percent as Citigroup Inc. recommended selling the company’s shares.

The DAX Index (DAX) advanced 0.3 percent to 7,720.47 at the close of trading in Frankfurt. The gauge has gained 1.4 percent this year as U.S. lawmakers struck a deal to prevent most scheduled tax increases and delay spending cuts in the world’s largest economy. The broader HDAX Index added 0.5 percent today.

“Overall, the earnings season may turn out a bit better than the previous one, though I doubt it will be dramatically better,” said Christoph Riniker, head of strategy research at Julius Baer Group Ltd. in Zurich. “Sentiment is currently quite positive, pointing to a potential of consolidation. We may see markets trading sideways in the next weeks after strong gains.”

German stocks dropped for a second day yesterday as exports and factory orders fell. The volume of shares changing hands on the DAX today was 47 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.

Alcoa (AA) unofficially kicked off the earnings season late yesterday. The largest U.S. aluminum producer reported fourth- quarter sales of $5.9 billion, beating the $5.6 billion average of 11 estimates in a Bloomberg News survey.

Industrial Production

German industrial output rose less than economists predicted in November. Production increased 0.2 percent from October, when it fell a revised 2 percent, the Economy Ministry in Berlin said today. That’s the first increase in four months. Economists had forecast a gain of 1 percent, according to the median of 23 estimates in a Bloomberg News survey.

Deutsche Bank AG and Commerzbank AG rose 1.3 percent to 36.70 euros, and 3.1 percent to 1.65 euros, respectively. A gauge of European lenders posted the second-best performance of the 19 industry groups in the Stoxx Europe 600 Index.

Deutsche Telekom AG (DTE) increased 3.4 percent to 9.14 euros, its biggest gain since Aug. 3. The Financial Times reported that infrastructure sharing was discussed at a meeting between European Union competition chief Joaquin Almunia and company executives including Deutsche Telekom, France Telecom SA, Telecom Italia SpA and Telefonica SA. The newspaper cited people familiar with the talks.

ThyssenKrupp Jumps

ThyssenKrupp AG, Germany’s largest steelmaker, rose 3 percent to 18.50 euros. ArcelorMittal, the world’s biggest steel manufacturer, has structured a bid for ThyssenKrupp’s Alabama steel plant, Chief Financial Officer Aditya Mittal said today on a conference call.

Lanxess dropped 2.2 percent to 61.84 euros after Citigroup downgraded the chemical maker to sell from neutral, saying that its earnings momentum may stall in 2013 as supplies of butadiene and synthetic rubber grow amid sluggish tire industry demand.

Allianz SE (ALV) declined 1.8 percent to 105.10 euros. Credit Suisse Group AG cut its recommendation for the company’s shares to neutral, the equivalent of hold, from outperform.

A gauge of European carmakers slipped after PSA Peugeot Citroen reported a 20 percent decline in fourth-quarter car sales. Volkswagen AG (VOW), the world’s second-largest carmaker slid 1.4 percent to 171.60 euros. Bayerische Motoren Werke AG (BMW), the biggest maker of luxury cars, lost 1.4 percent to 72.16 euros.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

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

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