German stocks slid the most in more than two years, closing at the lowest level since October, amid concern that the global economic recovery is stalling.
ThyssenKrupp AG sank 6.1 percent as metal prices retreated. Draegerwerk AG & Co. KGaA declined 12 percent as it reported a drop in second-quarter profit after taxes.
The benchmark DAX Index decreased 3.4 percent to 6,414.76 at the 5:30 p.m. close in Frankfurt, the seventh day of declines for the longest falling streak since January 2009. The gauge has retreated 15 percent from this year’s high on May 2 as investors speculated that Europe’s sovereign-debt crisis would derail the region’s economic recovery. The decline has left the DAX trading at 10.2 times the reported earnings of its companies, the lowest since 2008. The broader HDAX Index lost 3.6 percent today.
The European Central Bank left interest rates unchanged today as economic growth slows and the region’s debt crisis spreads to Italy and Spain, increasing pressure on policy makers to resume bond purchases. ECB officials meeting in Frankfurt kept the benchmark rate at 1.5 percent as predicted by all 54 economists in a Bloomberg News survey.
“We’re currently neutral on Europe and U.S. stocks,” said Christian Schick, head of portfolio management at BNP Paribas Investment Partners, in a phone interview. “It’s a situation that is currently more driven by politics than by the much better earnings season in the U.S. or lower valuations in Europe. We are underweight equities and we have been for a few weeks.”
ThyssenKrupp, Germany’s biggest steelmaker, slumped 6.1 percent to 25.60 euros as aluminum, lead, nickel, tin and zinc all fell on the London Metal Exchange. Salzgitter AG, the second largest, sank 4.9 percent to 41.19 euros.
Preferred shares of Volkswagen AG, Europe’s biggest carmaker, lost 4 percent to 121.30 euros, while Siemens AG, Europe’s biggest engineering company, declined 4 percent to 78.04 euros.
Draegerwerk tumbled 12 percent to 73.69 euros, its biggest decline since December 2008, as the medical-technology company said second-quarter profit after taxes fell to 30.4 million euros from 37.2 million euros in the year-earlier period.