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German Stocks Drop Fourth Day; Merck KGaA Plunges

German stocks declined for a fourth day, their longest losing streak in six weeks, amid growing concern the global economic recovery is faltering.

Merck KGaA (MRK) plunged the most since September 2010 as finance chief Matthias Zachert, who helped lead a turnaround of the company, quit to become chief executive officer of Lanxess AG. (LXS) Lanxess rallied the most since March 2012.

The benchmark DAX Index (DAX) slipped 0.5 percent to 9,349.22 at the close of trading in Frankfurt, its lowest level since Dec. 19. The gauge has retreated 2.1 percent since the New Year as investors considered equity valuations. The broader HDAX Index declined 0.6 percent today.

“Economic data out of Germany today was good, but the sentiment at the moment is still risk off,” said Alessandro Fezzi, a senior market analyst at LGT Bank Schweiz AG in Zurich. “Investors really got a big scare from the selloff on Friday, and those risks are still real, but the market seems to be focusing on earnings now.”

The volume of shares changing hands in companies listed on the DAX was 40 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.

Purchases of new homes in the U.S. fell in December by more than forecast, a report showed today. Sales decreased 7 percent to a 414,000 annualized pace, trailing all estimates in a Bloomberg survey, after a 445,000 rate in November, the Commerce Department said in Washington.

Currencies Slump

The Indian rupee, South African rand and the Brazilian real fell today, leading decliners among emerging- and developing-market currencies. The group tumbled last week, led by Argentina’s peso, amid concern the Federal Reserve will persist with a reduction in the pace of bond buying. Emerging and developing economies account for 29 percent of Germany’s trade, according to data compiled by Bloomberg.

The Central Bank of the Republic of Turkey called an extraordinary meeting of its monetary policy committee tomorrow to take policy measures to ensure price stability after the lira fell for an eleventh day. Following the announcement, the lira rose 1.9 percent.

German business confidence rose for a third month, a report showed today. The Ifo institute’s business climate index, based on a survey of 7,000 executives, advanced to 110.6 in January from 109.5 in December. Economists predicted an increase to 110, according to the median estimate in a Bloomberg survey.

Merck, Lanxess

Merck slumped 10 percent to 119.30 euros, for the biggest drop on the DAX. Zachert, who joined the company from Lanxess in 2011, will return to the synthetic-rubber maker and take over as CEO on May 15. Merck said Merck’s transformation project will continue following Zachert’s departure.

Lanxess rallied 8.2 percent to 48.72 euros, its biggest advance since March 2012.

Deutsche Lufthansa AG gained 1.6 percent to 17.73 euros. India lifted a ban on Airbus Group NV’s A380s from flying into the country, a move that will allow airlines including Lufthansa to send the double-decker plane to the world’s second-most populous nation.

Gagfah SA slid 1.2 percent to 10.70 euros as Goldman Sachs Group Inc. downgraded the third-biggest landlord of German homes to neutral from buy, citing its rally since Goldman upgraded the stock to buy on July 24. Gagfah jumped 25 percent since then through yesterday, compared with a 4.3 percent gain for the Stoxx 600 Real Estate Index.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editor responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net

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