May 20 (Bloomberg) -- German stocks advanced for a 10th consecutive day, their longest winning streak since July 2005, as shares of carmakers climbed.
Bayerische Motoren Werke AG and Volkswagen AG each rose more than 2.5 percent. Rheinmetall AG gained 4 percent as Deutsche Bank AG raised its recommendation on the maker of car parts and weaponry. Commerzbank AG, Germany’s second-largest lender, climbed 8.8 percent.
The DAX Index climbed 0.7 percent to a record level of 8,455.83 at the close in Frankfurt. The equity benchmark rallied 1.4 percent last week as measures of U.S. consumer sentiment and leading indicators beat economists’ estimates, and car sales in the European Union rose in April for the first time since September 2011. The broader HDAX Index also increased 0.7 percent to its highest-ever level.
“The DAX has underperformed some European markets this year and there are a lot of very good companies in there, so the rally will probably continue a bit further,” said Richard Scrope, who helps oversee about $160 million as a fund manager at Oriel Asset Management LLP in London, in a telephone interview. “Carmakers are doing well on the back of European production numbers last week, which had a positive reading for the first time in quite some months.”
The volume of shares changing hands in companies listed on the DAX was 34 percent lower than the average of the past 30 days, according to data compiled by Bloomberg. Markets in Switzerland, Austria, Denmark, Norway, Iceland and Luxembourg were closed today for the Whit Monday holiday.
BMW, the world’s largest maker of luxury vehicles, added 2.9 percent to 74.02 euros and Volkswagen gained 3.2 percent to 173.85 euros. Daimler AG rose 2.8 percent to 50.37 euros. A gauge of carmakers posted the best performance of the 19 industry groups in the Stoxx Europe 600 Index.
Morgan Stanley raised its recommendation on European automobile manufacturers to overweight, similar to a buy rating, from neutral. The brokerage said that the trend of earnings downgrades for the industry may stop as sales improve in Europe’s largest economies.
Rheinmetall climbed 4 percent to 39.62 euros as Deutsche Bank raised its recommendation on the maker of automotive parts to hold from sell. The bank said that European demand for cars and trucks may improve in the second half of the year.
Commerzbank surged 8.8 percent to 8.50 euros.
Deutsche Lufthansa AG rose 3.6 percent to 16.07 euros as Ryanair Holdings Plc, Europe’s biggest discount airline, said full-year profit increased 13 percent. That beat the average analyst estimate. A gauge of travel and leisure companies on the Stoxx 600 climbed 1.1 percent.
To contact the reporter on this story: Namitha Jagadeesh in London at email@example.com
To contact the editor responsible for this story: Andrew Rummer at firstname.lastname@example.org