German Stocks Slump as Siemens, BASF Retreat

German stocks declined the most in almost three weeks as Siemens AG (SIE) said it will miss its margin target and BASF SE (BAS) posted profit that missed estimates.

Siemens tumbled the most in almost two years after Europe’s largest engineering company said it will miss a profit-margin forecast. BASF slid 4.5 percent as the world’s largest chemical company also said meeting annual targets looks more difficult than at the start of the year. Commerzbank AG (CBK) lost 1.6 percent after a report that Germany’s second-biggest bank lent the bankrupt city of Detroit more than $400 million.

The DAX Index (DAX) retreated 1 percent to 8,298.98 at the close in Frankfurt, the biggest decline since July 5. The broader HDAX Index dropped 0.7 percent today.

“We had some bad outlooks from companies causing the market to trade lower,” Christian Schmidt, a market analyst at Helaba Landesbank Hessen-Thueringen in Frankfurt, said by phone. “Most of the positive news is priced in. Companies have to bring out further improvements and economic data needs to show further improvements to underline the prices we have now.”

The DAX has rallied 9 percent this year amid speculation global central banks will maintain stimulus measures. The benchmark gauge for German equities climbed 0.8 percent yesterday, halting a three-day decline, after reports indicated German manufacturing rebounded and service industries expanded at a faster-than-expected pace.

Confidence Climbs

Equities fell even as Germany’s business confidence rose for a third month in July. The Ifo institute’s business climate index, based on a survey of 7,000 executives, climbed to 106.2 from 105.9 in June and was in line with the 106.1 median forecast in a Bloomberg News survey.

The volume of shares changing hands in companies listed on the DAX today was 3.8 percent higher than the average of the past 30 days, according to data compiled by Bloomberg.

Siemens sank 6 percent to 78.62 euros, the largest drop since August 2011. The company said it no longer expects to achieve the profit margin of at least 12 percent for fiscal 2014 due to “lower market expectations.” Siemens is due to report third-quarter earnings on Aug. 1.

BASF sank 4.5 percent to 66.74 euros for the biggest drop in five months. Second-quarter earnings before interest, taxes and one-time items fell 5.4 percent to 1.83 billion euros ($2.42 billion), trailing the 1.99 billion-euro average estimate of analysts in a Bloomberg survey.

Smaller rival Lanxess AG (LXS) declined 2.8 percent to 46.73 euros, the biggest drop in three weeks.

Commerzbank Drops

Commerzbank fell 1.6 percent to 6.74 euros, snapping a five-day rally. The lender has more exposure to Detroit than Hypo Real Estate Bank or Dexia Bank, Frankfurter Allgemeine Zeitung reported, without saying where it got the information.

Commerzbank wrote down the value of a portfolio of credit extended to the city, Armin Guhl, a spokesman for the lender, said by phone. He declined to comment on the composition of the portfolio or the timing and size of writedowns.

Software AG (SOW) plunged 8.1 percent to 23.66 euros, the biggest drop in almost six months. The second-largest software maker in Germany posted second-quarter revenue of 237.7 million euros, falling short of the 245.8 million euros forecast by analysts.

Axel Springer AG (SPR) jumped 17 percent to 40.34 euros after agreeing to sell publications to Funke Mediengruppe GmbH for 920 million euros. That was the biggest advance for Europe’s biggest newspaper publisher since January 1999.

Wincor Nixdorf AG added 4.3 percent to 46.14 euros, the highest since July 2011. Europe’s biggest maker of automated teller machines posted third-quarter revenue of 575 million euros, surpassing sales of 567.2 million estimated by analysts on average, and raised its full-year forecasts.

To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net

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

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