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German Stocks Drop as Ukraine Says Russia Deploys Troops

April 15 (Bloomberg) -- German stocks fell as Ukraine accused Russia of deploying its armed forces in the east of the country, and a report showed a bigger-than-expected monthly decline in investor confidence in Europe’s largest economy.

Air Berlin Plc dropped 4.7 percent after a newspaper reported that concern has increased about Etihad Airways PJSC’s stake in the discount airline. Siemens AG lost 1.5 percent after the head of OAO Russian Railways said businesses including the engineering company stand to lose from sanctions against Russia.

The DAX Index dropped 1.8 percent to 9,173.71 at the close in Frankfurt, extending its decline in the final 90 minutes of trading. The benchmark has retreated 5.8 percent from its record on Jan. 17 . The broader HDAX Index fell 1.7 percent today.

“The decline is reflective of the weakness and volatility we’ve seen in the markets,” said Michael Ingram, a market strategist at BGC Brokers LP in London. “The real worry is if business and real-economy investment is stalling, and not just portfolio investment. The escalating situation in the Ukraine certainly isn’t helping.”

A measure of German investor confidence slipped to 43.2 in April from 46.6 in March, a bigger decline than the forecast reading of 45 predicted by economists surveyed by Bloomberg. The ZEW Center for European Economic Research’s index aims to predict economic developments six months in advance.

Ukraine said that the pro-Russian militias active in the east of the country included part of Russia’s 45th Airborne Regiment. Russia’s state-run RIA Novosti news service reported that four militants died as Ukrainian troops stormed an airport in Kramatorsk. Representatives of the European Union, the U.S., Ukraine and Russia meet in Geneva on Thursday in an attempt to calm the tension in eastern Ukraine.

Air Berlin

Air Berlin dropped 4.7 percent to 1.65 euros. Etihad’s attempt to restructure its 29 percent stake in the low-cost German airline may jeopardize Air Berlin’s takeoff and landing rights in Europe, Frankfurter Allgemeine Zeitung reported without citing anyone. The airline, which is owned by the government of the United Arab Emirates, plans to use its minority holdings to help funnel traffic through Abu Dhabi.

Siemens slipped 1.5 percent to 94.89 euros. EU and U.S. sanctions against Russia will affect Western companies such as Siemens that have rail projects in the country, Russian Railways Chief Executive Officer Vladimir Yakunin said in an interview with Handelsblatt.

To contact the reporter on this story: Trista Kelley in London at tkelley2@bloomberg.net

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

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