German Stocks Fall to End Three-Day Gain as Banks Slide
German stocks fell from a record, snapping a three-day winning streak, as bank shares declined and investors weighed quarterly sales and earnings reports.
Deutsche Bank AG (DBK) dropped 1.3 percent after the European Central Bank said the definition of capital it uses in future stress tests will be stricter. Allianz SE (ALV) retreated 1 percent after RBC Capital Markets cut its rating and price target on Europe’s biggest insurer. Aixtron SE fell 1.6 percent after peer Cree Inc. forecast quarterly earnings below analysts’ estimates.
The DAX Index (DAX) lost 0.4 percent to 8,909.07 at 9:47 a.m. in Frankfurt. The gauge advanced to a record yesterday as investors speculated that worse-than-forecast U.S. payrolls data could delay a reduction in Federal Reserve bond purchases. The broader HDAX Index also declined 0.4 percent today.
Data from the European Commission in Brussels at 4 p.m. may show consumer confidence in the euro area climbed to the highest since July 2011. An index of household confidence improved to minus 14.5 this month from minus 14.9 in September, according to the median forecast of 28 analysts in a Bloomberg News survey.
The European Central Bank said the definition of capital it uses to stress test banks will be stricter than the one in an imminent review of their assets, as it confirmed that lenders will be required to have a capital ratio of 8 percent.
The capital definition applicable on January 1, 2014 will be used for the asset-quality review, while the definition valid “at the end of the horizon” of the stress test will be used in that evaluation, the Frankfurt-based central bank said in an e-mailed statement today.
The ECB will commence its study in November and conclude the three-part exercise in October 2014 before assuming supervisory powers over the region’s banks. The European Union is scheduled to fully implement global capital rules by 2019.
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