German stocks fell, dragging the benchmark DAX Index from an all-time high, as stronger-than-forecast U.S. manufacturing growth fueled speculation the Federal Reserve will scale back stimulus.
Wacker Chemie AG dropped 3.6 percent after Citigroup Inc. downgraded Europe’s largest producer of polysilicon. EON SE, Germany’s biggest utility, retreated for a third day as Citigroup added the shares to its least-preferred list. Volkswagen AG, Europe’s biggest automaker, climbed 0.7 percent to the highest price since at least 1992.
The DAX declined 0.3 percent to 9,007.83 at the close of trading in Frankfurt, after rising to a record yesterday. The gauge has still gained 0.3 percent this week as Volkswagen rallied 6.8 percent on better-than-estimated third-quarter earnings. The broader HDAX Index slipped 0.2 percent today.
“The manufacturing data in the U.S. was stronger than expected,” James Butterfill, who helps manage about $44 billion as head of global equity strategy at Coutts & Co. in London, wrote in an e-mail. “This could be detrimental to equities as the market prices chances of an earlier taper. We continue to believe it will be in the latter part of the first quarter of 2014, providing support for equities in the last quarter.”
The Institute for Supply Management’s U.S. factory index increased to 56.4 in October, the highest since April 2011, from 56.2 a month earlier. The median forecast in a Bloomberg survey of 83 economists was 55. Readings above 50 indicate growth.
The Federal Open Market Committee maintained its monthly bond purchases at $85 billion this week and said it will wait for more evidence of sustained improvement before paring stimulus measures. The odds for the Fed to start reducing bond purchases in January rose to 45 percent from 25 percent before the statement, Citigroup Inc. said. Economists surveyed by Bloomberg Oct. 17-18 predicted the Fed would wait until March to begin the cuts.
China’s official manufacturing gauge rose more than forecast to the highest level in 18 months. The Purchasing Managers’ Index advanced to 51.4 in October, from 51.1 a month earlier, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in a report. The median estimate in a Bloomberg survey of economists called for 51.2.
Stock markets in Austria and Luxembourg are closed today for All Saints Day. The volume of shares changing hands in DAX-listed companies was 37 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
Wacker Chemie dropped 3.6 percent to 66.77 euros after Citigroup downgraded the shares to sell from neutral. The brokerage cut its profit estimates for the company, citing the outlook for the Siltronic unit, slower margin recovery in its chemicals businesses and a lower polysilicon earnings.
EON retreated 0.4 percent to 13.40 euros as Citigroup added the stock to its least-preferred list, replacing RWE AG, Germany’s second-biggest utility. RWE declined 0.9 percent to 26.96 euros.
Volkswagen preferred shares increased 0.7 percent to 188.45 euros, a fourth day of gains.
K+S AG, Europe’s biggest potash producer, advanced 2.2 percent to 19.20 euros. OAO Uralkali, the world’s largest producer of the crop nutrient, said it expects global demand for the chemical to climb to the highest for at least a decade next year as a decline in prices ends a slowdown in sales.
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