German stocks were little changed, after the benchmark DAX Index posted its biggest weekly gain in eight weeks, as investors awaited a decision from U.S. lawmakers on whether to take military action in Syria.
Munich Re advanced the most in three months as Bank of America Corp.’s Merrill Lynch unit recommended that investors buy the shares. Kabel Deutschland Holding AG declined after a report that Vodafone Group Plc’s bid for the cable company may collapse because of insufficient shareholder support for the offer. RWE AG and EON SE led utilities lower as brokers said recent rallies in both stocks were unjustified.
The DAX added less than 0.1 percent to 8,276.32 at the close in Frankfurt after rising as much as 0.4 percent and falling as much as 0.4 percent. The equity benchmark gained 2.1 percent last week as manufacturing growth in the U.S. and China, the world’s two largest economies, beat projections. The broader HDAX Index rose 0.1 percent today.
“We’re seeing encouraging developments in the global macro data and investor sentiment has improved substantially over the past couple of days,” said Matthias Jasper, head of equities at WGZ Bank AG in Dusseldorf, in a telephone interview. “Optimism is back and all the pitfalls we’re watching are already priced in the market. Still, people are quite nervous regarding any developments in Syria, and if strikes do happen then we’ll definitely see a temporary setback.”
U.S. President Barack Obama will attempt to persuade a skeptical Congress this week to support air strikes against the regime of Bashar al-Assad. He failed to win backing from global leaders at last week’s Group of 20 summit for military action in response to a chemical-weapons attack.
China’s exports rose 7.2 percent in August from a year earlier, according to a report from the General Administration of Customs in Beijing. That exceeded the 5.5 percent median estimate of analysts surveyed by Bloomberg.
The number of shares trading hands today in DAX-listed companies was 11 percent lower than the average of the past 30 days, data compiled by Bloomberg showed.
Munich Re gained 3.1 percent to 139.20 euros as Merrill Lynch upgraded its rating on the world’s biggest reinsurer to buy from neutral. The brokerage said that the absence of significant storms in the U.S. increases the likelihood of the company using excess cash to buy back shares. Munich Re’s stock had dropped 1 percent in 2013 before today’s gain, while the Stoxx Insurance 600 Index had advanced 12 percent.
Hannover Re, the world’s third-largest reinsurer, added 1.3 percent to 53.08 euros.
K+S AG, a German potash producer, jumped 8.2 percent to 20.35 euros. Forbes’s Russian edition named three possible bidders for Suleiman Kerimov’s 22 percent stake in OAO Uralkali, the world’s largest producer of the fertilizer ingredient. The magazine did not identify who gave it the information. K+S slumped 24 percent on July 30 as Uralkali ended a deal that controlled more than 40 percent of global supplies.
Kabel Deutschland slipped 0.6 percent to 85.22 euros. The cable operator’s shareholders may fail to tender enough of their stock to meet the 75 percent threshold needed for Vodafone to proceed with its purchase of the company, the Financial Times reported. The newspaper cited unidentified Kabel Deutschland shareholders. They have until Sept. 11 to accept Vodafone’s offer. Europe’s largest mobile-phone operator said in a statement that it will not change the conditions of its bid.
EON fell 1.7 percent to 12.49 euros and RWE lost 1.6 percent to 22.91 euros. Merrill Lynch downgraded EON to underperform, similar to a sell recommendation, from neutral, and reiterated the same rating on RWE, saying power prices may return to recent lows. EON has gained 4.3 percent this month and RWE has jumped 10 percent, while the DAX has added 2.1 percent.
HSBC Holdings Plc also reiterated its underweight rating on both utilities, citing a weak pricing outlook and the likelihood that their businesses in Germany will shrink.