German Stocks Little Changed As Japan Unveils Stimulus

German stocks were little changed, falling for the week, as declines by ThyssenKrupp AG (TKA) and RWE AG (RWE) offset optimism about a Japanese stimulus plan to accelerate a recovery in the world’s third-biggest economy.

ThyssenKrupp slid 1.9 percent. RWE fell 2.4 percent to its lowest in more than six months as European utilities declined. Deutsche Lufthansa AG (LHA) retreated 1.8 percent as UBS AG cut its rating on the stock. SAP AG rose 1.2 percent after unveiling a software overhaul.

The DAX Index (DAX) advanced 0.1 percent to 7,715.53 at the close of trading in Frankfurt, paring its weekly loss to 0.8 percent. The gauge has still gained 1.4 percent since the start of the year as U.S. politicians agreed on a compromise budget to prevent most scheduled tax increases and delay spending cuts. The broader HDAX Index rose 0.1 percent today.

“My feeling is the market is taking a breather, but without any selling pressure,” Matthias Jasper, head of equities at WGZ Bank AG in Dusseldorf, said in a phone interview. “There doesn’t seem to be optimism seeping in from Japan, though the initial trading days this year have been very strong and the market is already discounting a lot of good news.”

The number of shares changing hands on the DAX was 60 percent more than the average of the last 30 days, according to data compiled by Bloomberg.

In Japan, the Cabinet Office said the government will spend 10.3 trillion yen ($116 billion) to drag the economy out of its third recession in the last five years. The stimulus will increase gross domestic product by about 2 percentage points and create some 600,000 jobs, according to a statement.

Chinese Inflation

China’s Shanghai Composite Index (SHCOMP) dropped 1.8 percent today as the nation’s inflation accelerated faster than estimated, limiting room for easing. The consumer price index rose 2.5 percent in December from a year earlier, the National Bureau of Statistics said today in Beijing. That compares with the 2.3 percent median estimate in a Bloomberg News survey and a 2 percent gain in November.

ThyssenKrupp, Germany’s largest steelmaker, dropped 1.9 percent to 18.68 euros. A gauge of commodity-linked stocks performed the worst of the 19 industry groups on the Stoxx Europe 600 Index.

RWE retreated 2.4 percent to 29.98 euros, its lowest price since June 25. A gauge of European utility companies was among the worst performing on the Stoxx 600.

Lufthansa Downgraded

Lufthansa fell 1.8 percent to 14.51 euros. UBS downgraded its rating on Europe’s second-largest carrier to neutral from buy, saying the shares’ upside is limited after a 55 percent rally in 2012.

Deutsche Bank AG (DBK), Germany’s biggest lender, declined 0.3 percent to 37.26 euros, after earlier falling as much as 1 percent. Commerzbank AG (CBK), the second-largest German lender, lost 3.5 percent to 1.64 euros, its biggest drop since Nov. 16.

SAP gained 1.2 percent to 61.32 euros after unveiling the biggest overhaul to its mainstay enterprise software in two decades. At an event in Palo Alto, California, the largest maker of enterprise software showed a faster version of its Business Suite product.

To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net

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

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