April 11 (Bloomberg) -- German stocks declined, posting their biggest weekly retreat in nine months, as information-technology companies slid following yesterday’s rout in the U.S. equities with the highest valuations.
Infineon Technologies AG and SAP AG each dropped more than 2 percent as a gauge of IT shares posted the worst performance on the Stoxx Europe 600 Index. Salzgitter AG rose 1.2 percent after Citigroup Inc. recommended buying the stock.
The DAX Index retreated 1.5 percent to 9,315.29 at the close of trading in Frankfurt. The benchmark has fallen 3.9 percent this week, pushed lower by the selloff in the most expensive stocks and tensions in Ukraine. This week’s decline has extended the DAX’s drop from its record on Jan. 17 to 4.4 percent. The broader HDAX Index also slid 1.5 percent today.
“The correction justifiably comes from the sectors that have been running hot, with technology and biotech leading the way,” said Christian Zogg, who manages about $540 million as head of equity and fixed income at LLB Asset Management AG in Vaduz, Liechtenstein. “The tensions in the Ukraine also contribute to the negative effect on sentiment.”
The volume of shares changing hands in companies listed on the DAX was 16 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
U.S. technology shares tumbled the most in 17 months yesterday amid concern valuations may be too high. An index of biotechnology companies has slumped 19 percent from its all-time high, nearing the 20 percent threshold that marks the onset of a bear market.
Infineon Technologies, Europe’s second-biggest semiconductor maker, dropped 2.9 percent to 8.14 euros. SAP, the business software supplier, declined 2.3 percent to 56.96 euros. Software AG retreated 2.2 percent to 25.62 euros, its lowest price since January.
Continental AG fell 2.6 percent to 166.05 euros, posting the biggest drop on a gauge of European auto-related shares. Europe’s second-largest maker of car parts has tumbled 6.8 percent this week, its biggest plunge since September 2012.
Bauer AG lost 4.1 percent to 18.87 euros. The builder posted a net loss of 19.4 million euros ($27 million) for 2013 and said it won’t pay a dividend. It made a profit of 25.8 million euros in 2012. The company, which also makes machinery, said the loss has forced it to break the covenants on part of its debt, obliging it to negotiate a syndicated loan with its bankers. Bauer said it has started a program to cut costs.
Salzgitter advanced 1.2 percent to 30.81 euros after Citigroup upgraded the steelmaker to buy from neutral and raised its price forecast to 36 euros from 31 euros. The brokerage said it has grown positive on the company’s near-term earnings momentum as demand for construction-related steel increases.
To contact the reporter on this story: Corinne Gretler in Zurich at email@example.com
To contact the editors responsible for this story: Cecile Vannucci at firstname.lastname@example.org Will Hadfield, Srinivasan Sivabalan