German stocks declined the most in more than seven weeks as U.S. President Barack Obama’s administration vowed to hold Syria’s government liable for chemical-weapon attacks.
ThyssenKrupp AG, the country’s largest steelmaker, lost 3.1 percent after Nomura Holdings Inc. downgraded its recommendation on the shares. Volkswagen AG, Europe’s biggest automaker, and Bayerische Motoren Werke AG each lost 3.2 percent.
The DAX Index fell 2.3 percent to 8,242.56 at the close of trading in Frankfurt, its biggest decline since July 5. The benchmark gauge has traded within a 2.3 percent range since July 17 as volumes fell and investors awaited more economic reports to assess the strength of the economy. The broader HDAX Index also slipped 2.3 percent today.
“The escalating conflict with Syria might start a new wave of risk-off as it has the potential to pull conflicting global powers into a full-blown conflict in the Middle East,” Ion-Marc Valahu, co-founder and fund manager at Clairinvest in Geneva, said in a telephone interview.
The volume of shares changing hands in DAX-listed companies was 20 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.
U.S. Secretary of State John Kerry yesterday denounced an attack last week on a Damascus suburb as a “cowardly crime” requiring a response against Syrian President Bashar al-Assad’s regime. Syrian opposition groups say the attack killed more than 1,300 people.
Obama “believes there must be accountability for those who would use the world’s most heinous weapons against the world’s most vulnerable people,” said Kerry.
Iran’s Foreign Ministry warned that a U.S. attack on Syria would drag the whole region into conflict.
German business confidence rose for a fourth month in August. The Ifo business climate index, based on a survey of 7,000 executives, climbed to 107.5 from 106.2 in July, the Munich-based institute said today. That’s the highest since April 2012. Economists predicted an increase to 107, according to the median of 42 forecasts in a Bloomberg News survey.
ThyssenKrupp lost 3.1 percent to 15.82 euros as Nomura downgraded the shares to neutral from buy. The Japanese investment bank cut its estimate for the proceeds of ThyssenKrupp’s Steel Americas sale to 2.5 billion euros ($3.3 billion) from 2.8 billion euros and said it also expects a 1 billion-euro rights offer.
Volkswagen slipped 3.2 percent to 176.35 euros. BMW, the world’s largest maker of luxury cars, lost 3.2 percent to 73 euros. Continental AG, Europe’s second-biggest auto-parts supplier, retreated 3.7 percent to 116.75 euros.
A gauge of European auto-related companies fell the most of the 19 industry groups in the Stoxx Europe 600 Index.
Rational AG declined 3.5 percent to 227.15 euros after Kepler Cheuvreux downgraded the shares to reduce, similar to a sell rating, from hold.
The supplier of automated cookers for Queen Elizabeth II’s Buckingham Palace kitchen is now overpriced, according to Kepler, which cited a 17 percent recovery in the shares since a profit warning in July, saying they are now priced to “absolute perfection.”