German Stocks Drop After Rally as HeidelbergCement Falls

German stocks dropped after a two-day rally pushed the DAX Index (DAX) to its highest level in a month.

HeidelbergCement AG (HEI) slipped 1.4 percent as Societe Generale SA downgraded its rating on the world’s third-largest maker of cement. Salzgitter AG (SZG) gained 3.8 percent after reporting a narrower loss for the first quarter. Carl Zeiss Meditec AG (AFX) added 3.6 percent after quarterly profit and sales exceeded analysts’ estimates. K+S AG (SDF) rose percent as JPMorgan Chase & Co. recommended buying shares in the potash producer.

The DAX Index lost 0.3 percent to 9,581.09 at 9:58 a.m. in Frankfurt, trimming its gain this week to 0.3 percent. The benchmark remains 1.7 percent away from the record it reached on Jan. 17 as Russia’s annexation of Crimea and a separatist campaign in Ukraine raised concern that geopolitical tensions will disrupt trade and undermine Europe’s economic recovery. The HDAX Index also fell 0.3 percent today.

“It’s a difficult time to invest and a lot of valuations are already stretched,” Carsten Hilck, who oversees about $6.9 billion at Union Investment Privatfonds GmbH, said by phone from Frankfurt. “We have a macroeconomic tailwind, but a geopolitical headwind with Ukraine and Russia which keeps dragging on. Earnings momentum is losing steam in Europe, and good dividend yields won’t look so good once bond yields rise.”

The DAX trades at 13.3 times the projected earnings of its members, down from a multiple of 14.2 in December that was the highest valuation in almost four years. The volume of shares changing hands in DAX-listed companies was 14 percent lower than the 30-day average for this time of the day, according to data compiled by Bloomberg.

German exports fell 1.8 percent in March, according to a report from the Bundesbank today. They dropped 1.3 percent in February. Economists had predicted a gain of 1.3 percent. Imports (GRBTIMMM) unexpectedly retreated 0.9 percent in March, their first decline this year, the data showed.

To contact the reporter on this story: Sofia Horta e Costa in London at

To contact the editors responsible for this story: Cecile Vannucci at Will Hadfield

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