German stocks declined to a four-week low amid growing speculation the Federal Reserve will scale back monetary stimulus measures as soon as September and as two U.S. central bankers called for a reduction in bond purchases.
K+S AG, Europe’s biggest potash distributor, retreated to its lowest price in almost a year after Berenberg Bank cut its forecast for the shares. Solarworld AG jumped 4.3 percent as the European Union imposed tariffs on solar panels from China.
The DAX fell 1.2 percent to 8,196.18 at the close of trading in Frankfurt. The gauge gained 5.5 percent in May and has rallied in all but one of the past 12 months as central banks around the world maintained stimulus efforts. The broader HDAX Index also slipped 1.2 percent today.
“The overriding issue pushing markets lower is hawkish comments from senior officials at the Fed yesterday, which illustrate that the debate regarding the timing of tapering is a live issue,” Jeremy Batstone-Carr, head of research at Charles Stanley Group Plc in London, said in a telephone interview.
In the U.S., the benchmark Standard & Poor’s 500 Index turned lower yesterday after the close of European trading, to finish down 0.6 percent as economists at Goldman Sachs Group Inc. and Deutsche Bank predicted the Fed could start winding down its bond-buying program this summer.
Fed Bank of Dallas President Richard Fisher called for a reduction in the central bank’s monthly bond purchases.
“It would be prudent to dial back the rate of purchases we are making in mortgage-backed securities” now that “the housing market is in a good state, construction has started again, housing prices are appreciating significantly,” he said yesterday to reporters after a speech in Toronto.
Kansas City Fed President Esther George, who has dissented against record stimulus at every policy meeting this year, also urged the central bank to begin slowing the stimulus.
“Waiting too long to acknowledge the economy’s progress and prepare markets for more normal policy settings carries no less risk than tightening too soon,” she said in the text of a speech in Santa Fe, New Mexico. She was unable to speak because of illness.
K+S lost 2.1 percent to 30.74 euros, its lowest price since June 14, 2012, after Berenberg Bank cut its target on the shares to 28 euros from 30 euros, citing the increase in capital expenditure for a Canadian greenfield project.
HeidelbergCement AG, the world’s third largest maker of the building material, declined 1.8 percent to 57.80 euros. A gauge of construction and materials companies was among the biggest fallers in the Stoxx Europe 600 Index.
Solarworld, the world’s fourth-largest solar-panel maker, added 4.3 percent to 79.3 euro cents, after earlier rising as much as 9.2 percent. The EU imposed tariffs as high as 67.9 percent on panels from China in the largest commercial dispute of its kind, as it seeks to help revive a withering industry in Europe.
Producers including Solarworld have suffered “significant harm” as a result of dumped imports from China, the European Commission, the bloc’s trade authority in Brussels, said in a statement yesterday.
Wacker Chemie AG, a maker of the main raw material in solar panels, fell 2.6 percent to 53.63 euros. Commerzbank AG said the EU measures could increase financial risks for the company.
ThyssenKrupp AG advanced 0.3 percent to 15.40 euros, paring earlier gains of as much as 4 percent. Germany’s largest steelmaker agreed to sell its Brazilian plant to Cia. Siderurgica Nacional SA, the country’s third-biggest steelmaker, Platow Brief reported, without saying where it got the information.
Continental AG, Europe’s second-largest auto-parts supplier, climbed 0.2 percent to 101 euros, paring earlier gains of as much as 1.7 percent. HSBC Holdings Plc raised its target price on the shares to 123 euros from 105 euros, saying consensus forecasts underestimate the strength of Continental’s rubber operations.
The volume of shares changing hands in companies listed on the DAX was 9.2 percent lower than the average of the past 30 days, according to data compiled by Bloomberg.