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German Stocks Drop; K+S Falls, Offsetting Confidence Gain

Nov. 19 (Bloomberg) -- German stocks fell, snapping a three-day rally, as K+S AG and Commerzbank AG retreated, outweighing a report that showed investor confidence in Europe’s largest economy increased to a four-year high.

K+S declined 3.3 percent after an analyst said Billionaire Mikhail Prokhorov’s planned purchase of a OAO Uralkali stake may fail to restore potash prices. Commerzbank lost 1.4 percent, with a gauge of baking shares in the Stoxx Europe 600 Index posting the second-biggest decline among 19 industry groups. Infineon Technologies AG rose 1.7 percent after saying it would buy back shares.

The DAX slipped 0.4 percent to 9,193.29 at the close of trading in Frankfurt. The benchmark measure has surged 21 percent in 2013 as central banks around the world pledged to leave interest rates low for a prolonged period. The broader HDAX Index fell 0.4 percent today.

“We have had a huge upward movement in recent months and after the last three strong days, this is just a normal move in the market,” Herbert Perus, who helps oversee about $36 billion as head of equities at Raiffeisen Capital Management in Vienna, said by phone.

The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, climbed for a fourth month to 54.6 in November. That’s the strongest reading since October 2009 and up from 52.8 last month. Economists predicted an increase to 54, according to the median of 40 estimates in a Bloomberg News survey.

OECD Projections

The Organisation for Economic Cooperation and Development cut its global growth forecasts for this year and next as emerging-market economies including India and Brazil cool. The world economy will probably expand 2.7 percent in 2013 and 3.6 percent in 2014, instead of the 3.1 percent and 4 percent predicted in May, the Paris-based OECD said in a semi-annual report today.

The Federal Reserve will release minutes of its October policy meeting tomorrow. The document will reveal more details behind the decision to press on with $85 billion in monthly asset purchases. Fed policy makers will probably pare that pace to $70 billion at their March 18-19 meeting, according to the median estimate in a Bloomberg survey.

K+S, Europe’s biggest potash distributor, fell 3.3 percent to 19.96 euros. Prices for the key crop nutrient won’t rise significantly for a year or more, following a 30 percent slump, according to Elena Sakhnova, a VTB Capital analyst in Moscow.

Banks Fall

Commerzbank, Germany’s second-biggest bank, retreated 1.4 percent to 10.01 euros. Stoxx 600 lenders lost 1.2 percent as a group, the biggest decline after construction and materials companies.

Stada Arzneimittel AG, a manufacturer of pharmaceuticals, dropped 2.4 percent to 36.76 euros after Berenberg Bank downgraded the shares to hold from buy, citing disappointing third-quarter results and the likelihood of further restructuring costs.

Infineon Technologies gained 1.7 percent to 7.20 euros. Europe’s second-largest semiconductor maker said it plans to spend about 300 million euros ($405 million) repurchasing stock.

Metro AG advanced 7.9 percent to 35.78 euros after a Reuters report said Germany’s biggest retailer is considering an initial public offering of its Russian unit. The report cited unidentified people familiar with the matter.

To contact the reporter on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net

To contact the editor responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net

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