German stocks retreated as steelmakers declined after ArcelorMittal forecast a drop in earnings and Deutsche Bank AG slid following UBS AG’s surprise investment-banking loss.
ThyssenKrupp AG and Salzgitter AG, Germany’s biggest steelmakers, fell more than 2 percent as larger rival ArcelorMittal said fourth-quarter earnings may decline as much as a third from the prior three months. Deutsche Bank, the country’s biggest lender, fell 1.6 percent. Software AG rose 7.5 percent after increasing its outlook for the full year.
The benchmark DAX Index dropped 0.4 percent to 6,613.8 at the 5:30 p.m. close in Frankfurt after earlier losing as much as 0.9 percent. The broader HDAX Index slipped 0.4 percent.
“Today’s news flow from ArcelorMittal and UBS prompted some consolidation,” said Stefano Girola, who helps oversee about $4.2 billion at Banca Albertini Syz & Co. in Milan. “Banks are still a question mark because of an uncertain environment stemming from Basel III and volatility in investment banking business,” he said, referring to the capital rules agreed by regulators last month.
The DAX has surged 6.2 percent this month amid speculation that the U.S. Federal Reserve will announce another round of bond purchases at its November meeting in a bid to jumpstart the economy. The tactic, known as quantitative easing, is likely to spur global inflation while failing to deliver high growth or lower U.S. unemployment, Mohamed A. El-Erian, chief executive officer at Pacific Investment Management Co., said yesterday at a reception in New York.
ThyssenKrupp and Salzgitter fell 2.7 percent to 26.40 euros and 4.4 percent to 52.81 euros, respectively. ArcelorMittal, the world’s biggest steelmaker, forecast a decline in fourth-quarter earnings because of falling steel prices and rising costs.
Deutsche Bank slid 1.6 percent to 41.19 euros. UBS led banking shares lower across Europe after Switzerland’s biggest bank reported a third-quarter loss at its investment bank and a quarter-on-quarter drop in revenue from fixed income, currencies and commodities.
Singulus Technologies AG slumped 10 percent to 3.30 euros, the biggest decline since January, after the maker of machines that produce compact discs and DVDs posted a third-quarter operating loss.
Dialog Semiconductor Plc sank 7.6 percent to 12.60 euros, the most in five months, as the German semiconductor maker reported third-quarter net income of $13.3 million.
“The Figures are more or less in line, business is running well,” DZ Bank AG said in a note. “What we have missed is a clearer statement on the current situation of PMOLED design wins,” the brokerage said, referring to passive matrix organic light emitting diodes.
Software AG rallied 7.4 percent to 102.20 euros. Germany’s second-largest software maker said third-quarter profit climbed 20 percent, driven by increased sales, and raised its outlook for the year.
K+S AG, Europe’s biggest producer of potash, advanced 2.9 percent to 48.25 euros after analysts said rival Potash Corp. of Saskatchewan Inc. raised its prices. Equinet reiterated a “buy” rating on K+S.
Solar Millennium AG surged 18 percent to 19.88 euros after U.S. Interior Secretary Ken Salazar yesterday approved its Blythe Solar Power Project in California. The project aims to be the world’s largest power plant using heat from the sun to generate electricity.
Aleo Solar AG rose 3.4 percent to 16.80 euros. The solar company said it will increase the total annual production capacity of its three factories to 390 megawatts from 250 megawatts by the end of the coming year.
Puma AG gained 1.5 percent to 254.25 euros. Europe’s second-largest sporting-goods maker said third-quarter profit increased 14 percent and raised its full-year forecasts for sales and profitability.