Most German stocks declined, following the benchmark DAX Index’s biggest rally in two months yesterday, as investors looked toward a vote in Greece next week that’s needed to approve a package of austerity measures.
Siemens AG fell after Royal Philips Electronics NV said it plans further cost cuts because weak consumer demand hurt sales at its consumer lifestyle and lighting businesses. Suedzucker AG rallied 4 percent after forecasting an increase in revenue.
The DAX slipped 7.32, or 0.1 percent, to 7,278.19 at the 5:30 p.m. close in Frankfurt as four stocks fell for every three that gained. The gauge has fallen 3.3 percent from this year’s high on May 2 as investors speculated that the U.S. economic recovery is slowing and that Greece will fail to repay all of its debt. The broader HDAX Index slid 0.1 percent today.
Greek Prime Minister George Papandreou won a vote of confidence from 155 out of 300 lawmakers last night. He still needs parliamentary approval next week for a 78 billion-euro ($112 billion) package of budget cuts to stave off default. After the vote, police used tear gas and stun grenades to disperse thousands of citizens protesting planned budget cuts.
“The focus has quickly shifted towards next week’s vote on the austerity plan” in Greece, said Joshua Raymond, a market strategist at City Index Ltd. in London. “One would hope that having come through the uncertainty of a no-confidence vote, Papandreou is likely to garner enough support to help pass his new austerity plan. However, with the situation still highly fragile, not many investors are likely to take huge risks betting on that just yet.”
Siemens, Europe’s largest engineering company, slipped 0.8 percent to 92.75 euros. Philips’s lighting unit will probably have “low single-digit” sales growth in the second quarter as the western Europe consumer market and construction in mature markets are weaker than expected, the company said.
Merck KGaA fell 2.8 percent to 73 euros after the German drugmaker said it would no longer seek approval for the multiple sclerosis pill cladribine as regulators requested new clinical trials.
Suedzucker gained 4 percent to 23.66 euros, the highest since at least 1998. The maker of sugar, starch and bakery additives forecast an increase in revenue to about 6.5 billion euros and operating profit of more than 600 million euros for fiscal 2012.
Krones AG rallied 4.1 percent to 55.05 euros after the world’s biggest maker of bottling and packaging equipment was upgraded to “buy” from “neutral” at UBS AG.