German stocks declined, reversing earlier gains, after the European Union’s energy chief said Japan’s crippled Fukushima Dai-Ichi nuclear power plant risks a “major disaster.”
SAP AG fell 2 percent as the world’s biggest business-software company suspended operations from its office in Tokyo in the wake of the earthquake. Allianz SA, Europe’s largest insurer, slid 3 percent. Daimler AG, the world’s second-largest maker of luxury vehicles, also retreated.
The benchmark DAX Index lost 133.82, or 2 percent, to 6,513.84 in Frankfurt after earlier rising as much as 1.3 percent. The gauge has tumbled 12 percent from this year’s high on Feb. 18 amid concern that higher oil prices prompted by Arab revolts would curb global economic growth and as Japan’s Prime Minister Naoto Kan said the danger of further radiation leaks from the Fukushima plant had increased. The broader HDAX Index today slid 1.9 percent to 3,326.01 today.
European equity strategists at UBS AG and BofA Merrill Lynch Global Research said it is too soon to buy into stocks until it becomes clearer whether Japan will prevent its tsunami-struck nuclear reactors from making further discharges of radiation into the atmosphere.
“It’s still wait and see,” said Gary Baker, the head of European equity strategy at BofA Merrill Lynch in London. “We first need to see containment in Japan, then Asia and then global growth. Clearly no one feels comfortable with anything remotely connected to a nuclear meltdown.”
SAP retreated 2 percent to 39.60 euros. Allianz lost 3 percent to 91.26 euros.
Tokyo Electric Power Co. said a reactor containment vessel may have been breached at the Fukushima Dai-Ichi power plant. Pressure in the containment chamber of Dai-Ichi’s No. 2 reactor fell “substantially” today, said Masahisa Otsuku, a Tepco nuclear maintenance official.
“The site is effectively out of control,” EU Energy Commissioner Guenther Oettinger told a European Parliament committee. “In the coming hours, there could be further catastrophic events.”
Daimler fell 2 percent to 44.38 euros.
ADVA AG Optical Networking rallied 8.7 percent to 5.83 euros. The company may be taken over or merged with its partner Juniper Networks Inc., DAF Deutsches Anleger Fernsehen reported, citing an interview with ADVA’s Chief Executive Officer Brian Protiva.
Gildemeister AG rose 2.6 percent to 14.69 euros as the German maker of cutting tools said it will raise some 83 million euros ($115.5 million) by selling 4.56 million of new shares to Japan’s Mori Seiki Co.