German Stocks Climb Before Fed as BMW Gains on Forecast

German stocks rose for a fourth day as Bayerische Motoren Werke AG (BMW) forecast profit will jump because of its new models, while investors awaited a monetary-policy decision from the Federal Reserve.

BMW rallied the most since July 2010 after predicting sales will accelerate in the second half of the year. Air Berlin Plc surged the most in 13 months after disclosing that it has held talks on options that would affect the airline’s future. HeidelbergCement AG dropped 1.8 percent after saying debt rose last year more than analysts had predicted.

The DAX Index (DAX) advanced 0.4 percent to 9,277.05 at the close of trading in Frankfurt. The benchmark has jumped 259.26 points in the last four days as concern of a broader military conflict in Ukraine eased. The DAX has fallen 4.8 percent from its record on Jan. 17. The HDAX Index also gained 0.4 percent today.

“Car companies have had shrinking volumes for years, so today’s forecast from BMW is a good confidence boost for investing in the sector,” said Olgerd Eichler, who manages the 1.7 billion-euro ($2.4 billion) Top European Ideas Fund at Mainfirst Bank AG in Frankfurt. “It’s very important to get decent growth in Europe, which I think we will, as it’s where these companies get their highest margins. The DAX is still not too far from a record, and I think this level is warranted.”

The Federal Open Market Committee concludes its first meeting today under Chair Janet Yellen, who has said she will probably continue to reduce monthly bond purchases as long as the U.S. economy continues to strengthen. Economists surveyed by Bloomberg predict that the central bank will reduce its rate of bond buying to $55 billion from $65 billion and leave interest rates at 0.25 percent. The Fed releases a statement at 2 p.m. in Washington, after the close of German trading.

Fed Guidance

The Fed will probably scrap its 6.5 percent jobless rate threshold and adopt qualitative guidance for signaling when it will consider raising its benchmark interest rate, economists said in a survey.

BMW jumped 7.3 percent to 86.60 euros. The world’s largest maker of luxury cars predicted that pretax profit in 2014 will climb by at least a high single-digit percentage from the 7.91 billion euros that it generated in 2013. The company’s 16 new and refreshed models will help increase sales, BMW said today.

Air Berlin

Air Berlin jumped 15 percent to 2.35 euros. The airline postponed its annual results conference by one week to March 27 because it has started talks that could affect the company’s future. Air Berlin, which counts the United Arab Emirates’ Etihad Airways PJSC among its shareholders, didn’t specify the nature of the talks.

Brenntag added 0.8 percent to 132 euros after proposing a dividend of 2.60 euros per share for last year, more than the Bloomberg Dividend Forecast of 2.40 euros. Brenntag, which supplies Bayer AG with sulfuric acid, also recommended that shareholders receive two new shares for every share they already hold, according to a presentation on its website.

Deutsche Bank AG (DBK) climbed 1.8 percent to 32.45 euros, completing its longest winning streak in two months. Shares in Germany’s largest lender have rebounded after ending last week at their lowest price in almost 11 months. Commerzbank AG added 1 percent to 12.94 euros.

HeidelbergCement, which is rated below investment grade by two credit-rating companies, lost 1.8 percent to 60.22 euros. Net debt swelled to 7.5 billion euros in 2013 from 7.05 billion euros because it increased stakes in Australian and Russian joint ventures and took over a quarry in the U.K. Debt exceeded the 7.2 billion-euro average analyst estimate compiled by Bloomberg. The company also proposed a payout of 60 euro cents, less than the Bloomberg Dividend Forecast of 80 cents.

To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net

To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Will Hadfield, Alan Soughley

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