German stocks fell to the lowest since January as the leader of Greece’s largest political party failed to form a government after last weekend’s election, boosting speculation the nation will leave the euro.
Bayerische Motoren Werke AG lost 3.9 percent, leading automakers lower. Volkswagen AG dropped 2.3 percent. Munich Re declined 3.7 percent after reporting first-quarter results.
The DAX Index sank 1.9 percent to 6,444.74 at the close of trading in Frankfurt, its lowest level since Jan. 30. The start of trading was delayed for more than an hour due to a malfunction on Deutsche Boerse AG’s Xetra system. The benchmark gauge has still rallied 9.3 percent this year, led by gains in BMW, MAN SE and Henkel AG. The broader HDAX Index also fell 1.9 percent today.
“The political direction of Europe is entering a new phase of uncertainty which equity investors don’t like,” said Daniel Weston, a portfolio adviser at Schroeder Equities GmbH in Munich.
Antonis Samaras, the leader of the New Democracy party in Greece, failed to forge an agreement to form a government. The attempt passes to Alexis Tsipras, head of Syriza, the second-biggest party, which has vowed to cancel bailout terms for the nation.
Tsipras said he wouldn’t agree to join forces with New Democracy and Pasok, the two Greek parties that have supported austerity measures in return for international funds.
Tsipras called on the leaders of both parties to withdraw their pledges to impose the terms in writing by tomorrow when he is to meet with both of them to discuss forming a government. A left-wing coalition government would nationalize banks to spur growth, repeal recent labor reforms and immediately cancel the bailout accords, he said.
Stocks fell even as a report showed German industrial output rose more than three times as much as economists forecast in March. Production jumped 2.8 percent from February, when it dropped 0.3 percent, the Economy Ministry in Berlin said today.
BMW, the world’s largest maker of luxury vehicles, fell 3.9 percent to 67.35 euros. A gauge of automakers was the second-worst performer of 19 industry groups in the Stoxx Europe 600 Index.
Preferred shares of Volkswagen, the world’s second-biggest carmaker, dropped 2.3 percent to 136.05 euros. Daimler AG, the third-biggest, slid 2.8 percent to 38.25 euros.
Deutsche Bank AG and Commerzbank AG, Germany’s two largest banks, slid 2.5 percent to 30.76 euros and 3.4 percent to 1.53 euros, respectively.
MAN, Munich Re
MAN, the German truckmaker controlled by Volkswagen, slid 3.9 percent to 83.76 euros, dropping for a sixth day in the longest losing streak since August. The stock was cut to hold from buy at Societe Generale SA.
Munich Re, the world’s biggest reinsurer, fell 3.7 percent to 103.85 euros even after it returned to profit in the first quarter as natural-disaster claims dropped and investment income improved.
ThyssenKrupp AG, Germany’s largest steelmaker, sank 2.7 percent to 16.45 euros.
Adidas AG, the world’s second-biggest sporting-goods maker, lost 4 percent to 60.36 euros.
TUI AG, the travel company which owns a stake in container line Hapag-Lloyd AG, dropped 4.1 percent to 5.22 euros.
Infineon Technologies AG, Europe’s second-largest semiconductor maker, declined 4 percent to 6.81 euros.
Gildemeister AG added 1 percent to 15.10 euros as the German maker of cutting tools reported earnings that exceeded estimates and confirmed its forecasts.