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German Stocks Decline as DAX Advances for Seventh Quarter

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March 31 (Bloomberg) -- German stocks fell in the final 30 minutes of trading, almost erasing the DAX Index’s gains for the quarter, as RWE AG followed European utilities lower.

RWE lost 1.3 percent. SMA Solar Technology AG dropped the most since October 2012 as Deutsche Bank AG downgraded its rating on the stock. Drillisch AG rose 2.8 percent as Chief Executive Officer Paschalis Choulidis told a newspaper that the telecommunications company may pay a special dividend or buy back shares this year. Grammer AG added 2.4 percent after saying it plans to increase its annual payout by 30 percent.

The DAX fell 0.3 percent to 9,555.91 at the close in Frankfurt, erasing an advance of as much as 0.5 percent. The index gained less than 0.1 percent in the first three months of 2014 for its seventh consecutive quarterly advance, the longest winning streak since 1998. German shares still lost 1.4 percent in March as Russia annexed Crimea, prompting the West to impose sanctions. The broader HDAX Index also lost 0.3 percent today.

“Returns will be more muted going forward and momentum will stay lower for quite some time, but the market can still grind a little higher,” said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen.

The volume of shares changing hands in DAX-listed companies was 24 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.

Retail Sales

German retail sales climbed 1.3 percent in February, the Federal Statistical Office in Wiesbaden said today. Economists had predicted a drop of 0.5 percent, according to the median of 21 estimates compiled by Bloomberg News. Sales rose 2 percent from a year earlier.

RWE lost 1.3 percent to 29.46 euros. UBS AG listed the company among its European utilities to avoid, citing weak growth and its high valuation. The shares trade at 12.4 times projected earnings, more than their five-year average of 8.1 times, according to data compiled by Bloomberg.

SMA Solar slumped 12 percent to 38.50 euros as Deutsche Bank cut its rating on the operator of solar-power stations to hold from buy. Analyst Alexander Karnick cited the stock’s 90 percent rally in 2014 through to March 28.

Drillisch rose 2.8 percent to 26.34 euros. The company, which uses other companies’ networks to provide its customers with mobile-phone services, may return money to shareholders if it doesn’t make acquisitions by 2015, Welt am Sonntag reported, citing an interview with Choulidis.

Grammer, Jungheinrich

Grammer added 2.4 percent to 35.55 euros. The maker of car seats said it will pay a dividend of 65 euro cents (90 cents) a share for 2013, compared with 50 cents in 2012.

Jungheinrich AG gained 5.5 percent to 54.99 euros as Deutsche Bank upgraded its rating on the stock to buy from hold. Analyst Felicitas Von Bismarck said the forklift maker may increase its profit forecast for this year if the crisis in Ukraine fails to escalate. Jungheinrich predicted on March 26 that 2014 earnings before interest and taxes may not exceed 180 million euros.

Wacker Neuson SE climbed 4.4 percent to 12.53 euros. The maker of construction equipment predicted that its Ebit margin will increase as much as 80 basis points this year and sales climb as much as 12 percent. Wacker Neuson also said it will pay a dividend of 40 euro cents, more than the Bloomberg dividend forecast of 35 cents.

To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net

To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Will Hadfield, Alan Soughley

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