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German Stocks Decline From Highest Valuation Since 2009

Dec. 3 (Bloomberg) -- German stocks fell the most in three months, after yesterday reaching their highest valuation since 2009, as investors awaited Friday’s U.S. employment report to gauge when the Federal Reserve will reduce stimulus measures.

ThyssenKrupp AG lost 2.2 percent after raising 882.3 million euros ($1.2 billion) through a share sale. Kontron AG slid 2.8 percent as the maker of embedded computer boards said that its chief financial officer will leave at the end of the year. Fresenius Medical Care AG advanced 1 percent as Morgan Stanley raised its price forecast for the stock by 11 percent.

The DAX lost 1.9 percent to 9,223.4 at the close of trading in Frankfurt, slipping from a record 9,405.3 reached on Nov. 29. The equity benchmark rose 4.1 percent last month as it completed an eight-week rally. The gauge has still advanced 21 percent this year. The broader HDAX Index fell 1.9 percent today.

“The German stock market has presented itself as relatively uninspired at the beginning of this week and month, despite the new record high,” said Christian Schmidt, a technical analyst for equities. “It has been evident for some time that the momentum is wearing off. The approaching year-end also plays a role. Aside from short-term commitments, no strategic positions will be established.”

The price-earnings ratio for the DAX reached 13.9 yesterday, the largest multiple of projected profit since 2009. The volume of shares changing hands in DAX-listed companies was 42 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.

U.S. Economy

In the U.S., a Labor Department report on Friday will show the change in non-farm payrolls and the unemployment rate for November. A jobs report tomorrow will probably show that U.S. companies added the most workers since June. The Federal Reserve has said it will use labor-market changes to help it decide when to pare its $85 billion of monthly bond purchases.

The central bank publishes its Beige Book report on economic conditions in the world’s largest economy tomorrow, two weeks before the Federal Open Market Committee meets on Dec. 17-18. to consider changes to its stimulus program. Fed policy makers will probably reduce their monthly bond purchases to $70 billion at the March 18-19 meeting, according to the median of 32 estimates in Bloomberg’s most recent survey of economists conducted on Nov. 8.

The European Central Bank and the Bank of England both meet on Thursday.

ThyssenKrupp, Kontron

ThyssenKrupp fell 2.2 percent to 17.26 euros after Germany’s biggest steelmaker sold 51.4 million of new shares at 17.15 euros apiece. The stock dropped the most since August 2011 yesterday after the company said it would increase its capital by 10 percent of its market value.

Kontron retreated 2.8 percent to 5.54 euros. Gerhard Klingele will replace Andrea Bauer as chief financial officer on an interim basis, the company said in a statement. Bauer has only held the position for 11 weeks. Kontron said it has already started a search for a permanent replacement.

Commerzbank AG declined 3.9 percent to 10.47 euros, leading a gauge of European banking shares lower. German prosecutors raided the lender’s offices as part of an investigation into whether people used life-insurance policies to evade tax. Deutsche Bank AG lost 1.9 percent to 34.68 euros.

Allianz SE, Europe’s biggest insurer, dropped 2 percent to 125.25 euros. Allianz Real Estate will take a 49 percent stake in five French shopping malls from Paris-based developer Altarea Cogedim for 395 million euros.

Fresenius Medical Care climbed 1 percent to 51.80 euros. Morgan Stanley reiterated its overweight rating, which is similar to a buy recommendation, on the world’s biggest provider of kidney dialysis. The brokerage raised its price estimate to 59 euros. Morgan Stanley said that a U.S. regulator’s decision last month not to cut Medicare payments to companies that provide dialysis should restore investors’ confidence in Fresenius Medical Care’s business model.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

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

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