German Stocks Rise as Investor Confidence Beats Estimates

German stocks advanced to their highest level in nearly five years as a report showed confidence among the country’s investors rose.

ThyssenKrupp AG surged 5.6 percent, for the biggest gain on the DAX Index. EON SE and RWE AG climbed 2.6 percent and 2.2 percent, respectively, as a gauge of utilities posted the biggest increase on the Stoxx Europe 600 Index.

The DAX added 0.8 percent to 7,589.75 at the close of trading in Frankfurt, its highest level since January 2008. The benchmark measure has rallied 27 percent from this year’s low on June 5 as the European Central Bank unveiled a plan to buy the bonds of euro-area countries that seek its help. The broader HDAX Index increased 0.7 percent today.

“This shows a clear improvement in sentiment,” said Jerome Forneris, who helps manage $8.5 billion at Banque Martin Maurel in Marseille. “This statistic is closely followed by investors. Germany is the locomotive of Europe.”

The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, climbed to 6.9 this month from minus 15.7 in November. Economists had forecast a gain to minus 11.5, according to the median of 38 estimates in a Bloomberg News survey.

In the U.S., Fed rate setters begin a two-day meeting today. The officials will consider whether to supplement $40 billion a month of mortgage-bond purchases with Treasury purchases when their Operation Twist program expires at the end of this month. They will also issue updated projections on economic growth, unemployment and inflation on Dec. 12.

Italy’s Election

In Italy, Prime Minister Mario Monti said that his resignation and the elections due as early as February will not lead to a political vacuum in the country.

ThyssenKrupp rallied 5.6 percent to 17.18 euros. Germany’s largest steelmaker said it will sell its Steel Americas business by the end of next year. Chief Financial Officer Guido Kerkhoff said that more than five bidders have expressed an interest in either or both of the plants in Alabama and Rio de Janeiro state. The shares earlier dropped as much as 3.4 percent after the company said that it won’t pay an annual dividend after reporting a second straight yearly loss, including a 3.6 billion-euro ($4.7 billion) writedown for the Steel Americas unit.

EON and RWE rose 2.6 percent to 14.20 euros and 2.2 percent to 31.90 euros, respectively. German electricity for the next day increased to the highest price in 10 months, according to broker data compiled by Bloomberg, as output from renewable sources fell and RWE shut its Gundremmingen-C reactor for an unplanned stoppage.

Luxury Cars

Bayerische Motoren Werke AG, the world’s biggest maker of luxury cars, gained 1.8 percent to 70.59 euros. The stock was raised to buy from hold at MM Warburg & Co.

Solarworld AG, Germany’s biggest maker of solar panels, rallied 9.7 percent to 1.07 euros. Serbia plans to cut feed-in tariffs for wind farms and solar parks to stimulate renewable energy. It will also increase incentives for electricity generated by small hydroelectric plants.

Nordex SE added 2.8 percent to 2.92 euros. The wind-turbine maker received a contract to supply and install 32 turbines at a wind farm in Romania.

Aixtron SE slid 3.5 percent to 8.73 euros. Equinet Bank AG cut its share-price forecast for the maker of equipment for the semiconductor industry to 7.50 euros from 8 euros. The brokerage said business trends remain subdued in LED markets following a meeting with Aixtron’s head of investor relations.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE