Oct. 31 (Bloomberg) -- German stocks climbed to a record, extending a monthly advance, as carmakers rallied, outweighing a decline in Deutsche Lufthansa AG after its revenue missed analysts’ estimates.
Volkswagen AG and Daimler AG each gained more than 1.5 percent. Lufthansa lost 2.9 percent, the biggest drop on the benchmark DAX Index, after Europe’s second-largest airline said the strengthening euro will stop sales at its main passenger arm from growing this year. Deutsche Boerse AG slid 2.5 percent after its U.S. options unit reported problems disseminating prices late yesterday.
The DAX gained 0.3 percent to 9,033.92 at the close in Frankfurt. The gauge earlier dropped as much as 0.4 percent amid speculation that the Federal Reserve will taper its bond purchases sooner than forecast. The equity benchmark has advanced 5.1 percent this month and 11 percent since the beginning of September, completing its biggest back-to-back monthly gains since the first two months of 2012. The broader HDAX Index also increased 0.3 percent today.
“The markets have been very focused on the macroeconomic events such as the Fed,” Yves Marcais, an equity sales trader at Global Equities in Paris, said in a phone interview. “It’s more the remarks about the vision that the Fed has over the health of the American economy that have disappointed a bit.”
In the U.S. yesterday, the Federal Open Market Committee decided against reducing its $85 billion of monthly bond purchases. The policy-setting panel said the U.S. economy shows signs of underlying strength, though it will wait for more evidence of sustained improvement before slowing stimulus.
In a statement released at the end of a two-day meeting, the FOMC dropped its warning from last month that “the tightening of financial conditions observed in recent months -- if sustained -- could slow the pace of improvement in the economy and labor market.”
The odds of the central bank starting to taper its stimulus in January rose to 45 percent from 25 percent before yesterday’s statement, Citigroup Inc. said. Economists surveyed by Bloomberg on Oct. 17-18 had predicted the Fed would wait until March to reduce its monthly bond purchases.
Volkswagen climbed 2 percent to 187.20 euros after Citigroup Inc. raised its 12-month price estimate on the preferred shares of Europe’s largest car manufacturer to 224 euros from 220 euros. The brokerage cited the company’s control of costs and strong cash flow.
Auto-related companies posted the largest rally of the 19 industry groups in the Stoxx Europe 600 Index today. Daimler AG, the world’s third-biggest manufacturer of luxury cars, advanced 1.8 percent to 60.44 euros.
Lufthansa lost 2.9 percent to 14.27 euros after posting third-quarter revenue of 8.3 billion euros ($11 billion). That missed the average analyst estimate of 8.4 billion euros. The airline also said that the single currency’s appreciation cut 380 million euros from revenue in the nine months through September. The euro has posted the best performance among a basket of 10 developed-market currencies this year.
Deutsche Boerse dropped 2.5 percent to 55.45 euros. Its International Securities Exchange business, which runs the third-largest U.S. options venue, had trouble sending information yesterday to the Options Price Reporting Authority. That was at least the sixth mishap this year involving the main price feed for equity derivatives.
Draegerwerk AG & Co. lost 2.2 percent to 86.50 euros. The aerospace supplier posted an earnings before interest and taxes margin of 5.8 percent for the three months through September. It generated a margin of 7.6 percent in the same period a year ago.
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