German stocks advanced to the highest level since June 2008 after a report showed the country’s manufacturing and service industries climbed more than economists had forecast in October and the country raised its growth forecast.
Volkswagen AG surged 3.6 percent as Europe’s largest carmaker moved forward a sales goal. MAN SE rose 3.2 as Fiat SpA raised its yearly forecasts. Rhoen-Klinikum AG added 1.9 percent as HSBC Holdings Plc recommended the shares. TUI AG fell 2.7 percent after its TUI Travel Plc unit restated figures for the 2009 fiscal year and agreed to the departure of Chief Financial Officer Paul Bowtell.
The benchmark DAX Index rose 1.3 percent to 6,611.01 at the 5:30 p.m. close in Frankfurt, extending yesterday’s 0.5 percent rise. The measure has rallied 6.1 percent this month amid speculation policy makers at the U.S. Federal Reserve will announce another round of asset purchases at their November meeting in a bid to jumpstart economic growth. The broader HDAX Index also gained 1.3 percent today.
“The PMI data show we are on the right track right now and Germany has momentum for further growth,” said Andreas Lipkow, an equity trader at MWB Fairtrade Wertpapierhandelsbank AG in Frankfurt. “Germany has a special position in Europe and German corporates are in pretty good shape. We will have a good earnings quarter.”
An index measuring growth in manufacturing rose to 56.1 from 55.1, while the services industry gauge increased to 56.6 from 54.9. A reading above 50 indicates expansion.
The German government raised its forecast for economic growth to 3.4 percent this year and 1.8 percent in 2011, Economy Minister Rainer Bruederle said in Berlin today. The government previously forecast expansion of 1.4 percent and 1.6 percent, respectively.
European manufacturing unexpectedly grew this month, Markit Economics said today. China’s economy expanded 9.6 percent in the third quarter, increasing pressure on the country to let the yuan gain as Group of 20 officials prepared to meet in Seoul tomorrow to discuss currencies.
U.S. initial jobless claims fell last week by 23,000 to 452,000, a level that’s consistent with little improvement in the labor market, Labor Department figures showed today. The Conference Board’s gauge of the outlook for the next three to six months probably rose 0.3 percent, according to the median estimate of economists surveyed before a report due at 10 a.m. in New York.
Of the 35 companies in the Stoxx 600 that have announced results since Oct. 7, 26 have beaten analyst estimates for per-share income, according to data compiled by Bloomberg. In the U.S., 97 of the 113 S&P 500 companies that have announced results this earnings season have topped predictions, the data show.
Volkswagen preferred shares gained 3.6 percent to 93.78 euros, the highest close in more than two years. The carmaker is bringing forward its goal to exceed 10 million unit sales by three years to 2015, Manager Magazin reported, citing internal planning.
Volkswagen is aiming for 10.2 million unit sales five years from now, including sales from Porsche SE, MAN SE and Scania AB, the magazine said. VW originally intended to pass the 10 million-mark in 2018, it said.
MAN SE, Europe’s third-largest truckmaker, climbed 3.2 percent to 83.72 euros. Fiat raised its 2010 forecasts after quarterly profit beat analysts’ estimates on sales of Iveco trucks and Case New Holland tractors.
Deutsche Lufthansa AG, Europe’s second-biggest airline, gained 1.7 percent to 15.13 euros, the first advance in three days. Deutsche Post AG, Europe’s biggest mail carrier, increased 1.3 percent to 13.58 euros.
Rhoen-Klinikum rose 1.9 percent to 17.50 euros as HSBC initiated coverage of the operator of rehabilitation and emergency health care facilities with an “overweight” rating.
Wirecard AG, a maker of electronic payment and risk management software, surged 8.9 percent to 10.82 euros, the highest close since May 2008. EBay Inc., owner of the second-most visited e-commerce site, forecast fourth-quarter sales and earnings that exceeded analysts’ estimates.
TUI AG tumbled 2.7 percent to 8.64 euros, dropping for a third day. Earnings per share for the year ended September 2009 were reduced to 21 pence from 23.8 pence, and the company is writing off a total 117 million pounds ($185 million) in receivables in the U.K. business after faults in integrating computer systems, Crawley, England-based TUI Travel said today in a statement.
Porsche SE lost 3.5 percent to 38.40 euros, erasing yesterday’s advance. The carmaker wants permission from shareholders to possibly sell convertibles bonds as a way to raise capital and reduce debt, according to the company’s invitation for next month’s annual general meeting.
Deutsche Wohnen AG sank 7 percent to 8.65 euros, the biggest decline since November. Bank of America Corp. said it sold 9.3 million Deutsche Wohnen shares for 8.25 euros apiece on behalf of funds advised by Oaktree Capital Management LP.