Germany’s benchmark DAX Index closed little changed, with the gauge posting a third monthly gain, as weakness among bank shares amid concern that Europe’s sovereign debt crisis will worsen offset an advance at Hochtief AG.
Deutsche Bank AG and Commerzbank AG fell, tracking losses in European banks. Hochtief gained 2 percent after the German financial regulator BaFin cleared the path for a 2.7 billion- euro ($3.6 billion) takeover by Actividades de Construcción y Servicios SA.
The DAX lost 9.48, or 0.1 percent, to 6,688.49 at the 5:30 p.m. close in Frankfurt. The gauge climbed 1.3 percent in November as the U.S. Federal Reserve unveiled another round of bond purchases to boost the world’s largest economy, a tactic known as quantitative easing.
“The banking sector has again come under pressure today as the market starts to focus, not only on Portugal, but on Spain as well and European banking exposure there,” said Michael Hughes, a markets analyst at CMC Markets in London.
Banks and the euro are being dragged down by concern Portugal and Spain may suffer the fate of Ireland, which had to ask for an 85 billion-euro ($111 billion) rescue package to help bail out its banks. Italian and Spanish bond yields rose today compared with German debt. The extra yield investors demand to hold 10-year Italian debt instead of benchmark German bunds widened to more than 200 basis points for the first time since the euro’s debut in 1999.
Real-estate prices in 20 U.S. cities rose in September at the slowest pace in eight months, showing the latest slump in sales is destabilizing housing.
The S&P/Case-Shiller index of property values climbed 0.6 percent from September 2009, the smallest gain since January, the last time prices declined year over year, the group said today in New York. The increase was smaller than the 1 percent median forecast in a Bloomberg News survey of economists.
The DAX pared declines after a report showed businesses in the U.S. expanded at a faster pace in November than forecast. The Institute for Supply Management-Chicago Inc. said its business barometer rose to 62.5 this month, highest since April, from 60.6 in October. The Conference Board’s confidence index rose to 54.1, exceeding the median forecast in a Bloomberg News survey.
Deutsche Bank and Commerzbank, the country’s largest banks, retreated 1.4 percent to 36.59 euros and 1.8 percent to 5.61 euros, respectively. European banking shares posted the second-biggest decline among 19 industry groups in the Stoxx Europe 600 Index today, falling as much as 1.7 percent.
Hochtief rose 2 percent to 57.05 euros. Madrid-based ACS on Sept. 16 announced an all-stock offer to buy Hochtief, proposing eight of its own shares for every five of the German builder’s. Bafin approved the proposal yesterday, having asked for “significant improvements” from ACS.
“From our point of view the only way to defend ACS is to expose the fundamental value of the company, which is significantly above the current share price,” DZ Bank analyst Marc Nettelbeck wrote in a report today.