German stocks increased for a second day amid speculation central banks globally will work to boost the economic recovery following the Bank of Japan’s actions.
ThyssenKrupp AG rose 1.8 percent after anticipating a pretax profit of about 1 billion euros ($1.39 billion) in the fiscal year through September. CENTROTEC Sustainable AG climbed 6.2 percent as it lifted its earnings forecast. ElringKlinger AG sank 6.5 percent after selling new shares. Infineon Technologies AG lost 1.2 percent following technology shares lower in Europe.
The DAX index gained 54.90, or 0.9 percent, to 6,270.73 at the 5:30 p.m. close in Frankfurt. The measure rallied 4.4 percent in the third quarter on speculation the Federal Reserve and other central banks will step in to provide more stimulus for the ailing global recovery. The broader HDAX Index gained 0.8 percent today.
“The surprising decision by the BoJ to scale up asset purchases boosted expectations that other central banks may follow,” Stefan Kolek, a Munich-based strategist at UniCredit SpA, said in a note. “The short-term reaction to the steps was positive, with risky markets rallying.” However, he noted that “scaling up asset purchases does represent de facto an acknowledgement that stimulus policies did not work because consumers and companies are still worried about the future.”
The unexpected decision by the Japanese central bank yesterday to drop its interest rate to “virtually zero” and expand its balance sheet follows the U.S. Federal Reserve’s move toward more unconventional easing. Bank of England officials will consider further stimulus tomorrow, while the central banks of Australia, Canada and New Zealand are among those now holding fire on further interest-rate increases.
Federal Reserve Bank of Chicago President Charles Evans said the central bank needs to do “much more” to help the economy, including a new round of Treasury security purchases and possibly declaring that inflation should rise beyond an informal 2 percent target, the Wall Street Journal reported yesterday.
Gold rose to a record in London and New York, and silver extended gains to a 30-year high today.
A report by the Economy Ministry in Berlin showed today that German factory orders increased almost four times the pace economists forecast in August, led by demand for investment goods such as machinery.
European stocks trimmed their advance after data from a private report on payrolls showed companies in the U.S. unexpectedly cut workers in September.
ThyssenKrupp gained 1.8 percent to 24.93 euros. The steelmaker anticipates a pretax profit of about 1 billion euros in the fiscal year through September, Handelsblatt reported, citing Chief Executive Officer Ekkehard Schulz.
Deutsche Lufthansa AG increased 2.1 percent to 14.04 euros as European airlines advanced, following EasyJet Plc after Europe’s second-biggest discount airline said full-year profit beat its forecasts on surging demand for flights to beach resorts and European cities and lower-than-expected losses from the Icelandic ash cloud.
HeidelbergCement AG, the world’s third-largest cement maker, advanced 2.7 percent to 37.16 euros, tracking gains in construction stocks in Europe.
Volkswagen AG gained 1.2 percent to 84.95 euros. The carmaker plans to double the number of dealers in China to about 2,600 in the coming years, Handelsblatt reported, citing sales chief Christian Klingler.
Volkswagen, which anticipates record vehicle deliveries this year, is targeting 2 million car sales in China next year, the newspaper said.
CENTROTEC Sustainable advanced 6.2 percent to 15.18 euros. The company raised its earnings forecast, saying it now expects full-year earnings before interest and taxes of 36 million euros to 37 million euros, having forecast 30 million euros to 32 million euros earlier.
ElringKlinger plummeted 6.5 percent to 22.39 euros. The company issued 5.76 million new shares without subscription rights at a price of 21.50 euros each mainly to finance its growth.
Shares of chipmaker Infineon declined 1.2 percent to 5.08 euros as technology shares were the worst performers in Europe, led by Autonomy Corp. after the U.K.’s second-largest software company cut its forecast for full-year revenue growth.
Q-Cells SE dropped 5.6 percent to 3.7 euros. Nomura International Plc trimmed its price estimate on the solar company to 4.50 euros from 6.50 euros.