German Stocks Rise After Spanish Bank Stress-Test Results

German stocks advanced as test results showed the stress to the Spanish banking system was within estimated limits, and a gauge of manufacturing in the U.S. rose more than forecast, outweighing data showing further evidence of an economic slowdown in Asia.

Deutsche Boerse AG rose 1.3 percent after a report that the Frankfurt-based exchange is considering a return to offering currency futures contracts. Infineon Technologies AG surged 4.5 percent. Deutsche Lufthansa AG climbed 1.5 percent as the International Air Transport Association raised its 2012 global airline profit forecast.

The DAX Index added 1.5 percent to 7,326.73 at the close of trading in Frankfurt. The benchmark has rallied 23 percent from this year’s low on June 5 as European Central Bank policy makers approved an unlimited bond-buying program and the U.S. Federal Reserve started a third round of asset purchases. The broader HDAX Index also added 1.5 percent today.

“For the mood of the markets it was very important that the stress test to the Spanish banking system was no negative surprise,” said Robert Halver, head of capital markets research at Baader Bank AG in Frankfurt. “The handicap of the European debt crisis for the European markets will lose momentum and that is very good news for the DAX.”

Spain’s banks have a capital deficit of 59.3 billion euros ($76.3 billion), less than previously estimated, according to a test designed to lift doubts about the financial industry’s ability to absorb losses.

Spanish Banks

The Bankia group, a nationalized lender, had a 24.7 billion-euro deficit and Banco Popular Espanol SA had a 3.22 billion-euro shortfall in stress tests conducted by management consultants Oliver Wyman. The tests of 14 lenders showed no deficit for seven including Banco Santander SA, Banco Bilbao Vizcaya Argentaria SA and Banco Sabadell SA, the Bank of Spain and Economy Ministry said after markets closed on Sept. 28.

The Institute for Supply Management’s U.S. factory index rose to 51.5 in September from 49.6 a month earlier, the Tempe, Arizona-based group said today.

Economists in a Bloomberg survey projected a reading of 49.7 for September, according to the median of 76 forecasts. The dividing line between expansion and contraction is 50, and economists’ estimates ranged from 48 to 51.2.

A Chinese factory index came in at 49.8 for September, the first time it fell below 50 for two straight months since 2009, a statistics bureau report showed in Beijing. Japan’s Tankan index of large manufacturers’ confidence fell to minus 3 for the past quarter. South Korean shipments slid for a third month.

Euro Jobless

Unemployment in the economy of the 17 nations using the euro was 11.4 percent in August, the same as in June and July after those months’ figures were revised higher, the European Union’s statistics office in Luxembourg said today. That’s the highest since the data series started in 1995 and in line with median of 30 economists’ forecasts in a Bloomberg News survey.

Deutsche Boerse increased 1.3 percent to 43.64 euros. The operator of the Frankfurt exchange may launch currency futures contracts to help it compete more aggressively with the Chicago-based CME, according to a report in the Wall Street Journal.

Infineon Technologies, Europe’s second-biggest semiconductor maker, surged 4.5 percent to 5.16 euros.

Lufthansa, Europe’s second-largest airline, climbed 1.5 percent to 10.71 euros. IATA raised its 2012 global airline profit forecast 37 percent as carriers slow capacity growth to cope with higher fuel prices and waning travel demand.

Carriers may post $4.1 billion of profits this year with a margin of 0.6 percent, the group, whose members account for 84 percent of global airline traffic, said in a statement today. That compares with a June forecast for gains of $3 billion and a profit of $8.4 billion in 2011.

HeidelbergCement AG, the world’s third-largest maker of the building material, added 2.9 percent to 41.94 euros.

Bayer Gains

Bayer AG, Germany’s biggest drugmaker, surged 2.5 percent to 68.53 euros after a study showed its Stivarga treatment for advanced colorectal cancer, which won U.S. regulatory approval last week, helps patients live longer.

In a trial of 760 people with colorectal cancer that progressed after treatment with all other approved drugs, 24 percent of those receiving Stivarga were alive after a year, compared with 17 percent of those getting a placebo, according to data presented at the European Society of Medical Oncology’s meeting in Vienna today.

Evotec Advances

Evotec AG rose 5.9 percent to 2.89 euros after it said it will develop gynecological drugs with Bayer in an agreement that may be worth more than 592 million euros ($764 million).

The biotechnology company will receive 12 million euros up front and as much as another 580 million euros if certain research and sales targets are met, as well as “low double-digit” percentage royalties on future sales, depending on its contribution, the drugmaker said today in a statement.

BASF SE, the world’s largest chemical maker, gained 2.8 percent to 67.46 euros as a gauge of companies in the chemical sector posted the second biggest rise of the 19 industry groups in the Stoxx Europe 600 Index.

Hannover Re, the world’s fourth-biggest reinsurer, added 2.1 percent to 50.77 euros as Exane BNP Paribas raised its recommendation on the stock to outperform, the equivalent of buy, from underperform. Long-term profitability is supported by very solid reserves, attractive property and casualty reinsurance growth prospects, according to Exane.

Munich Re, the world’s biggest reinsurer, rose 1.9 percent to 123.75 euros. Chief Executive Officer Nikolaus von Bomhard said in an interview with the Financial Times that the company’s business in China is growing by almost 20 percent annually because of the capital needs of the country’s domestic insurers.

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