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German Stocks Climb for Second Day; Infineon, Q-Cells Advance

June 14 (Bloomberg) -- German stocks rose for a second day, led by gains in technology companies, as China reported industrial production that topped forecasts and U.S. retail sales declined less than economists had predicted.

SAP AG and Infineon Technologies AG climbed more than 1.5 percent. Q-Cells SE and Solarworld AG advanced as Handelsblatt reported that LDK Solar Co. seeks acquisitions in Germany. Gagfah SA jumped 3.7 percent as Germany’s largest publicly traded property company sued the City of Dresden over its claim that Gagfah broke a sales agreement.

The benchmark DAX Index rose 1.7 percent to 7,204.79 at the 5:30 p.m. close in Frankfurt. The gauge has still fallen 4.3 percent from this year’s high on May 2 amid concern that the U.S. economic recovery is slowing and as speculation grew that Greece may default on its debt. The broader HDAX Index climbed 1.6 percent today.

“China’s industrial output was a big surprise today as everyone in the last few days was worried about the economy slowing down in the country,” said Andreas Lipkow, an equity trader at MWB Fairtrade Wertpapierhandelsbank AG in Frankfurt. “Markets are reacting positively and the data had a good impact on steel companies.”

China’s industrial production rose more than estimated in May, while inflation accelerated to the fastest pace in almost three years. Production gained 13.3 percent from a year earlier, exceeding the median economist forecast of 13.1 percent in a Bloomberg survey. The 5.5 percent annual gain in consumer prices matched estimates.

Retail Sales

German stocks consolidated their gains after the U.S. Commerce Department released a report showing that retail sales fell 0.2 percent in May. That beat the median forecast of economists surveyed by Bloomberg News for a decline of 0.5 percent.

SAP, the largest maker of business management software, gained 2.1 percent to 42.79 euros, while Infineon, Europe’s second-biggest chipmaker, rose 1.9 percent to 7.60 euros. Aixtron SE surged 2.1 percent to 26.64 euros, ending the longest falling streak in three months. Technology stocks posted the best performance among 19 industry groups in the benchmark Stoxx Europe 600 Index, rising 1.7 percent.

Salzgitter AG, Germany’s second-biggest steelmaker, advanced 1.4 percent to 50.85 euros, while Kloeckner & Co. SE gained 3.3 percent to 20.45 euros. Aluminum, copper, lead, nickel, tin and zinc all advanced on the London Metal Exchange.

Q-Cells, Solarworld

Q-Cells jumped 6.5 percent to 1.73 euros, while Solarworld increased 4 percent to 9.45 euros after Handelsblatt reported that LDK Solar, a Chinese maker of solar panels, is looking for acquisitions in Germany. The newspaper cited an interview with Chief Financial Officer Jack Lai. LDK prefers companies with technical knowledge and a good brand, Lai told the newspaper.

“We could see more consolidation though acquisitions in the solar sector with Asian companies expressing interest in German companies,” Lipkow said.

Phoenix Solar AG soared 6 percent to 17.76 euros, the highest price since May 11, as the company said it signed a contract with Solarta Co. Ltd. for two solar power stations in Thailand. Both plants have a peak output of about 16 megawatts, Phoenix Solar said.

Gagfah surged 3.7 percent to 5.26 euros, its biggest gain since March. The company’s counter claim followed Dresden’s decision to sue Gagfah for 1.08 billion euros ($1.6 billion) in April. That lawsuit, over claims that Gagfah broke an agreement for apartments at its WOBA Dresden unit, was based on “strongly motivated economic interest” and distorted the company’s share price, Gagfah said in a statement today.

GEA Group AG jumped 3.3 percent to 23.67 euros as the engineering firm whose machines milk a third of the world’s dairy cows was raised to “equal weight” from “underweight” at Morgan Stanley.

Wirecard AG rallied 3 percent to 11.94 euros, the largest advance in five weeks, after the maker of electronic-payment and risk-management software won a payment-processing contract from Air Berlin Plc.

To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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