German stocks fell the most in three months amid speculation that China may take further measures to cool inflation and increasing concern about the depth of Europe’s fiscal crisis.
Bayerische Motoren Werke AG and Daimler AG slid more than 2 percent after new-car registrations in Europe declined for a seventh month. BASF SE, the world’s largest chemicals maker, plunged the most since June. Infineon Technologies AG, Europe’s second-biggest chipmaker, climbed 4.2 percent as third-quarter earnings beat analysts’ estimates.
The benchmark DAX Index sank 1.9 percent to 6,663.24 at the 5:30 p.m. close in Frankfurt, the biggest drop since Aug. 11. The broader HDAX Index tumbled 2 percent. Ireland is in talks with European and International Monetary Fund officials about a bailout that would shore up the state’s finances and allow the injection of capital into its banks, said a European official with direct knowledge of the talks.
“Equities are down as Ireland continues to dig in its heels over a bailout, while accelerating inflation in China has market participants worrying about another rate hike by the country’s central bank,” said Mads Koefoed, a market strategist at Saxo Bank A/S in Copenhagen. “Equities look a bit stretched at the moment and I’m looking for a 5 to 10 percent correction in the remainder of 2010.”
Irish bonds fell, reversing a two-day rally, on concern that European finance ministers might fail to strike a deal at a meeting in Brussels that started at 5 p.m. today. Elsewhere in Europe, Austria threatened to block its next transfer of funds to Greece unless the government gets a deficit-cutting plan agreed with the EU and IMF back on track.
Chinese Central Bank Governor Zhou Xiaochuan said China is under “pressure” from capital inflows as a state newspaper said price controls could be imposed to cool the fastest inflation in two years. Zhou reiterated government goals of “moderate” credit growth and stronger liquidity management at a forum in Beijing today. The China Securities Journal said price limits are possible for food, citing unidentified sources.
BMW, the world’s biggest maker of luxury cars, fell 2.6 percent to 54.62 euros and Daimler, the second-largest, lost 2.8 percent to 49.47 euros.
European car sales fell 16 percent to 1.06 million vehicles in October from 1.27 million a year earlier, the Brussels-based European Automobile Manufacturers’ Association said today. Ten-month sales declined 5 percent to 11.6 million.
Separately, Daimler’s Mercedes-Benz unit recalled 11,739 vehicles in Japan because of a problem with the cars’ steering wheels, according to a filing today with the nation’s transport ministry.
BASF tumbled 3.9 percent to 54.98 for the biggest drop in the DAX. ThyssenKrupp AG and Salzgitter AG, Germany’s largest steelmakers, retreated 2.8 percent to 27.22 euros and 4.7 percent to 50.80 euros, respectively, as base metals slumped on the London Metal Exchange.
Separately, ThyssenKrupp would have to close one of its steel blast furnaces in a “worst case” scenario as a result of Germany’s goals to cut carbon-dioxide output, Manager Magazin cited Chief Executive Officer Ekkehard Schulz as saying.
Infineon climbed 4.2 percent to 6.22 euros, the biggest gain since August. The chipmaker said it will pay its first dividend in a decade after reporting fiscal fourth-quarter net income of 390 million euros. Earnings beat the 216.2 million- euro average profit estimate of analysts in a Bloomberg survey.
Catalis SE rose 2.5 percent to 16.5 euro cents. The maker of optical testing equipment said third-quarter operating profit before one-time costs more than doubled to 700,000 euros.
About 72 percent of the 29 companies in the DAX that have announced quarterly results since Oct. 7 have beaten analyst estimates for per-share income, according to data compiled by Bloomberg.