German Stocks Rebound From One-Month Low; Merck, Deutsche Bank Shares Rise
German stocks advanced, with the benchmark DAX Index rebounding from its lowest level in a month, as Deutsche Bank AG and Merck KGaA climbed.
Merck rose 2.2 percent as UniCredit SpA recommended buying the shares. Sky Deutschland AG posted the biggest advance in more than two months, while Deutsche Bank followed European banking shares higher. Arques Industries AG surged 9.6 percent as the company said it’s in advanced talks to sell its majority in the cordless phone unit of Siemens AG.
The DAX gained 0.1 percent to 6,010.91 in Frankfurt, the first advance in four trading sessions. The gauge has still fallen 5.4 percent from this year’s high on Aug. 9 as the Federal Reserve said the pace of recovery in the U.S. economy will probably be “more modest” than forecast. The broader HDAX Index advanced 0.2 percent today.
“The market is stabilizing after a sharp fall and the volumes are picking up,” said Thomas Nagel, a trader at Equinet AG in Frankfurt. “I have been long on the market since the DAX reached 6,165 on July 30 and I will switch to a neutral position if the index closes below 6,000.”
A report today showed growth in Europe’s services and manufacturing industries weakened more than economists forecast in August, signaling the pace of the recovery has peaked.
A composite index based on a survey of euro-area purchasing managers in both industries declined to 56.1 from 56.7 in July, London-based Markit Economics said today. Economists expected a reading of 56.3, according to the median of 14 forecasts in a Bloomberg News survey. A reading above 50 indicates expansion.
Merck, Deutsche Bank
Merck climbed 2.2 percent to 68.74 euros as the German chemicals and drugmaker was raised to “buy” from “hold” at UniCredit, which said it sees the acquisition of U.S. biotech equipment supplier Millipore Corp., completed last month, as “value enhancing” and expects “synergies to drive the division growth above industry average.”
Deutsche Bank, which accounts for 6.2 percent of the DAX by weighting, rose 0.8 percent to 51.26 euros as European banking shares posted the best performance in the Stoxx Europe 600 Index.
Sky Deutschland jumped 11 percent to 1.02 euros. Germany’s biggest pay-television company is in talks with cable network operators including Kabel Deutschland Holding AG and Unitymedia GmbH to combine distribution activities, Handelsblatt reported today, citing an interview with Chief Executive Officer Brian Sullivan.
Arques jumped 9.6 percent to 1.82 euros. The company is holding “very advanced” negotiations with one potential buyer and Siemens is willing to support the sale provided an “economic safeguard and a strategic direction” for the Gigaset unit can be found, the Starnberg, Germany-based holding company said in a statement today.
Vossloh AG climbed 2.5 percent to 77.50 euros. The maker of railroad equipment won a provisional order worth 140 million euros for high-speed rail track securing systems from the Chinese rail ministry, the company said in an e-mailed statement. The contracts will be signed in the coming weeks, Vossloh said.
Centrotherm Photovoltaics AG rose 1.4 percent to 33.82 euros. The solar company said it boosted the efficiency and cut the production costs of a solar cell used to make panels for electricity generation.