German stocks were little changed, with the DAX Index posting its first weekly loss this month, as Italian bonds retreated after a debt auction amid concern that the governing coalition will break up.
HeidelbergCement AG lost 1.9 percent as HSBC Holdings Plc advised investors to reduce their holdings in the company. K+S AG dropped 3.6 percent after Exane BNP Paribas cut its price estimate on the shares of Europe’s biggest potash distributor. Adidas AG, the world’s second-largest maker of sporting goods, advanced after Nike Inc. beat profit estimates.
The DAX fell less than 0.1 percent to 8,661.51 at the close in Frankfurt. The equity benchmark has lost 0.2 percent this week amid concern that U.S. politicians will fail to approve a budget before the start of the new financial year on Tuesday. It has still risen 6.9 percent this month after the Federal Reserve unexpectedly refrained from reducing its monthly asset purchases, and has gained 14 percent this year. The HDAX Index rose less than 0.1 percent today.
“Markets are a bit concerned with some analysts saying there is a 50-50 chance that the Italian government may collapse,” said Michael Hewson, an analyst at CMC Markets in London. “Plus, you have a possible government shutdown in the U.S. We are up for the month and for the quarter, so if you are an investor closing your book today, you are likely to be booking some profits amid all this uncertainty.”
Italy’s Prime Minister Enrico Letta meets President Giorgio Napolitano today amid tensions in the governing coalition. People of Liberty’s lawmakers have threatened to resign from parliament if former premier Silvio Berlusconi’s tax-fraud conviction leads the Senate to expel him.
Italy’s government bonds fell as the nation auctioned 6 billion euros ($8.1 billion) of debt maturing in 2018 and 2024.
The yield on 10-year securities climbed eight basis points, or 0.08 percentage points, to 4.42 percent, extending this week’s advance to 13 basis points, amid speculation that traders who deal directly with the Treasury had to hold on to most of the securities on offer at today’s auction.
The volume of shares changing hands in DAX-listed companies was 24 percent lower than the average of the past 30 days, according to data compiled by Bloomberg.
U.S. lawmakers have until Monday to agree to an emergency budget to keep the federal government operating from Oct. 1, the beginning of the 2014 fiscal year, through Dec. 15.
A shutdown of the U.S. government would cut fourth-quarter economic growth by as much as 1.4 percentage points depending on its length, economists said. Mark Zandi of Moody’s Analytics Inc. estimated a three-to-four week shutdown would cut growth by 1.4 points. Moody’s projected a 2.5 percent annualized rate of growth in the fourth quarter without a closure.
HeidelbergCement fell 1.9 percent to 58.15 euros. HSBC cut its recommendation on the world’s third-largest maker of cement to neutral, similar to hold, from overweight, saying that a slowdown in emerging markets will sustain market oversupply.
K+S dropped 3.6 percent to 19.31 euros. Exane reduced its price estimate on the shares to 13 euros from 15.50 euros, citing a downside risk to potash prices and a possible increase in supply of the material from lower-cost producers.
Adidas climbed 1 percent to 80.12 euros. Nike, the world’s largest sporting-goods company, posted fiscal first-quarter profit that topped analysts’ estimates after demand for running and basketball shoes helped North American sales.
Nordex SE rose 4.3 percent to 10.85 euros, its highest price since January 2010. The wind-turbine maker said it won its largest-ever contract for a German wind farm with N117/2400 turbines from STEAG New Energies GmbH. It didn’t disclose financial details of the deal.