German stocks fell, extending the benchmark DAX Index’s weekly decline, as indications that the Asian economy is slowing outweighed a surprise increase in U.S. consumer sentiment.
Lanxess AG, the German maker of specialty chemicals, retreated 4.4 percent after Credit Suisse Group AG and Barclays Plc cut their recommendations. MAN SE, the truckmaker controlled by Volkswagen AG, slid 3.3 percent after saying next year will be even tougher than 2012 as orders in the third quarter slumped more than normal.
The DAX fell 0.7 percent to 7,232.49 at the close in Frankfurt, after shifting between gains and losses at least 10 times. The measure has still rallied 21 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 dropped 0.7 percent today.
“Stocks are caught in a range,” said Witold Bahrke, a senior strategist at PFA Pension A/S in Copenhagen, where he helps oversee $55 billion. “The risk is limited by investors expecting Spain to inevitably seek a bailout, while the upside is capped by insecurity about the U.S. political situation and macro data still not showing signs of a substantial improvements.”
The DAX has declined 2.2 percent this week as the International Monetary Fund cut its global growth forecasts.
China’s new lending missed forecasts last month as the government struggles to reverse a slowdown in the world’s second-biggest economy. Banks extended 623.2 billion yuan ($99.5 billion) of local-currency loans, the People’s Bank of China said today. That compared with the median estimate of 700 billion yuan in a Bloomberg survey of economists.
The DAX briefly erased its losses after the Thomson Reuters/University of Michigan preliminary U.S. consumer sentiment index increased to 83.1 this month from 78.3 in September. The gauge was projected to fall to 78, according to the median forecast of 71 economists surveyed by Bloomberg News.
Euro-region industrial production unexpectedly increased for a second month in August. Output rose 0.6 percent from July, when it expanded a revised 0.6 percent, the European Union’s statistics office in Luxembourg said today. Economists had projected a drop of 0.4 percent, the median of 36 estimates in a Bloomberg News survey. From a year ago, output slipped 2.9 percent after a 2.8 percent decline in July.
Lanxess dropped 4.4 percent to 60.21 euros, the largest decrease since July 23. Barclays cut its recommendation on the German specialty chemicals maker to equal weight, the equivalent of hold, from overweight. Credit Suisse downgraded its rating to underperform from neutral, meaning investors should sell the shares.
MAN slid 3.3 percent to 75 euros, the biggest retreat since July 26. The truckmaker’s decline in third-quarter business was stronger than seasonal patterns, Chief Financial Officer Frank Lutz said today at an analyst meeting in Nuremberg. Stefan Straub, a spokesman for the Munich-based company confirmed the comments.
Deutsche Telekom AG slipped 2.1 percent to 9.16 euros. A shareholder sued the board of MetroPCS Communications Inc. over its proposed tie-up with the German phone company’s T-Mobile USA unit, claiming it fails to provide stockholders adequate compensation.
Paul Benn, a shareholder in the mobile-phone company, argued the deal would give Deutsche Telekom an “unfair and unjustified windfall” and the directors failed their duty to get the best deal, according to a complaint filed yesterday in Delaware Chancery Court in Wilmington. Benn seeks to represent all investors as a group.
Commerzbank AG, Germany’s second-largest bank, gained 1.9 percent to 1.48 euros. JPMorgan Chase & Co., the biggest U.S. bank by assets, posted a record third-quarter profit that beat analysts’ estimates as mortgage revenue soared 72 percent.
Software AG surged 12 percent to 30.35 euros, the biggest gain in almost a year. The infrastructure software provider confirmed its annual forecast and said growth in license sales is expected to continue in the fourth quarter.