German stocks fell the most in almost three weeks as reports showed industrial production in the U.S. unexpectedly dropped last month and the economy of the euro zone grew at a slower-than-expected pace in the first quarter.
Deutsche Post AG (DPW) declined the most in two years after Europe’s largest postal company reported first-quarter profit that missed analysts’ estimates. Suedzucker AG dropped 4.6 percent after MSCI Inc. said it would remove the sugar producer from its index of German equities.
The DAX Index declined 1 percent to 9,656.05 at the close in Frankfurt. The benchmark has still rallied 5.3 percent from a low on April 15 as mergers-and-acquisitions activity increased and European Central Bank President Mario Draghi said officials are ready to ease monetary policy at their June meeting if necessary. The HDAX Index also slipped 1 percent today.
“While the GDP numbers are disappointing, investors are more concerned with the future,” said Konstantin Giantiroglou, head of investment advisory at Neue Aargauer Bank AG in Brugg, Switzerland. “In that sense, the next ECB meeting is regarded as more important. The irony is that the disappointing data in the periphery will strengthen the case for further monetary easing, which should support risky assets.”
The volume of shares changing hands in DAX-listed companies was 58 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
In the U.S., a Federal Reserve report showed that industrial production unexpectedly declined in April. Output from factories, mines and utilities decreased 0.6 percent. The median forecast in a Bloomberg survey of economists had called for an unchanged reading. The measure rose 0.9 percent in March.
A Eurostat release showed euro-area gross domestic product increased 0.2 percent in the first three months of this year, less than the 0.4 percent that economists had forecast. The economies of Italy, the Netherlands and Portugal (PTGDPQOQ) all unexpectedly contracted, while French GDP failed to increase.
Deutsche Post retreated 5.2 percent to 26.22 euros. Earnings before interest and taxes rose 2.3 percent to 726 million euros ($995 million). That missed the average analyst estimate of 752.4 million euros compiled by Bloomberg.
Suedzucker fell 4.6 percent to 15.80 euros. MSCI said late yesterday that it will remove the company from the MSCI Germany Index with effect from May 30. Separately, Suedzucker lowered its dividend to 50 euro cents a share for 2014 from 90 cents a year earlier.
RWE AG and EON SE, Germany’s biggest power utilities, dropped 3.3 percent to 26.14 euros and 2.2 percent to 12.97 euros, respectively. A German regulator increased its forecast for the amount of power capacity that the country will lose through 2018. The authority forecast a net reduction of 3,648 megawatts in a statement on its website.
Deutsche Telekom AG rose 2 percent to 13.12 euros. Europe’s biggest telecommunications operator predicted that earnings per share will reach 80 euro cents in 2015. The consensus analyst estimate had called for 68 cents. The company made a profit of 63 cents a share in 2013.
Manz AG gained 2.6 percent to 67.53 euros. The manufacturing-equipment maker reported that revenue increased 9 percent to 54.2 million euros in the first quarter.
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