German stocks declined as investors weighed Angela Merkel’s victory in yesterday’s election.
LEG Immobilien AG (LEG) dropped 4.4 percent amid the prospect of a grand coalition that would see the Social Democrats replacing the liberal Free Democrats. Volkswagen AG (VOW) climbed 0.8 percent as a gauge of carmakers rose the most among the 19 industry groups in the Stoxx Europe 600 Index.
The DAX Index (DAX) fell 0.3 percent to 8,650.93 at 9:20 a.m. in Frankfurt. The gauge rose for a third week last week after the Federal Reserve refrained from reducing its $85 billion of monthly asset purchases, and investors awaited the outcome of the German election. The HDAX Index dropped 0.2 percent today.
“Angela Merkel is the clear winner of this election,” Raimund Saxinger, a fund manager at Frankfurt-Trust Investment GmbH, which oversees about $22 billion, wrote in an e-mail before the final results. “Clearer than even the optimists would have expected. However, in a twist of irony, her combined backing has diminished as her coalition-partner FDP has not made it into parliament. If she needs a coalition-partner, it will be the SPD.”
Merkel’s Christian Democratic bloc took 41.5 percent, compared with 25.7 percent for the SPD, led by Peer Steinbrueck, in yesterday’s election, according to results from all 299 districts. That leaves her short of a majority and needing a coalition partner to govern Europe’s biggest economy.
The FDP, which served as the junior partner in Christian and Social Democrat-led governments, won less than the 5 percent needed to enter the Bundestag. Party leaders will meet today to discuss coalition talks.
To contact the reporter on this story: Jonathan Morgan in Frankfurt at firstname.lastname@example.org
To contact the editor responsible for this story: Andrew Rummer at email@example.com