German Stocks Climb; HeidelbergCement, Deutsche Bank, Deutsche Boerse Gain
German stocks rallied, sending the DAX Index to its highest level in more than two years, after the Federal Reserve announced an additional $600 billion of bond purchases to bolster the world’s largest economy.
HeidelbergCement AG surged 8.9 percent after saying profit more than doubled in the third quarter. Metro AG rose 3.7 percent after the company said it will open more stores in China. Deutsche Telekom AG declined 1.7 percent as third-quarter operating profit dropped. Beiersdorf AG fell 1.9 percent after lowering its earnings forecast.
The DAX climbed 1.8 percent to 6,734.69 at the 5.30 p.m. close in Frankfurt, the highest level since June 2008. The measure retreated yesterday as investors waited for the outcome of the Fed’s policy meeting. The broader HDAX Index gained 1.6 percent today.
“We see equity markets reacting positively to the Fed announcement as they are getting further support,” said Raimund Saxinger, a fund manager at Frankfurt Trust Investment GmbH, which oversees about $22 billion. “There is still a bit of upside left towards the end of the year and the rally could continue into next year. My year-end target for the DAX and EuroStoxx are still a bit higher compared to current levels.”
U.S. stocks climbed yesterday after the Fed said new purchases will be about $75 billion a month through June and it will “adjust the program as needed.” Most economists surveyed by Bloomberg predicted policy makers would add at least $500 billion to the financial system. Asian stocks extended the global rally as the central bank also left unchanged its pledge to keep interest rates low for an “extended period.”
European Central Bank
The European Central Bank kept interest rates at a record low today. The ECB’s Governing Council in Frankfurt set the benchmark lending rate at 1 percent for a 19th month, as predicted by all 55 economists in a Bloomberg News survey.
A report today showed Europe’s services and manufacturing industries expanded at a faster pace than initially estimated in October, led by surging output in Germany.
A composite index based on a survey of euro-area purchasing managers in both industries slipped to 53.8 from 54.1 in the previous month, London-based Markit Economics said today. It had initially reported a drop to 53.4. A reading above 50 indicates expansion. A services gauge for the euro region fell to 53.3 from 54.1.
HeidelbergCement, the world’s third-largest maker of cement and concrete, jumped 8.9 percent to 40.95 euros. Net income rose to 322 million euros ($455 million) from 149 million euros a year earlier, the company said in a statement today. Sales rose 13 percent to 3.4 billion euros. Analysts surveyed by Bloomberg had estimated net income of 258 million euros, on sales of 3.34 billion euros.
Metro gained 3.7 percent to 53.55 euros, the highest close since March 2008. The world’s third-largest retailer will open more than 10 consumer-electronics stores in Shanghai by the end of 2012 and add a total of more than 100 stores in China by 2015 to benefit from rising demand for TV sets and laptops in the world’s most populous country.
Metro aims to win a 10 percent share of China’s consumer- electronics market, which is forecast to double to 180 billion euros ($256 billion) in a decade.
Thyssenkrupp AG and Salzgitter AG increased 1.7 percent to 27.01 euros and 3.4 percent to 53.95 euros, respectively. Aluminum, copper, lead, nickel, tin and zinc all rose on the London Metal Exchange today.
Deutsche Telekom, Europe’s largest telecommunications company, fell 1.7 percent to 10.27 euros. Adjusted earnings before interest, taxes, depreciation and amortization fell to 5.02 billion euros ($7.1 billion) from 5.53 billion euros a year earlier, the Bonn-based company said in a statement today. Analysts had estimated operating profit of 5.09 billion euros. Sales slid to 6.32 billion euros from 6.47 billion euros. The company confirmed its full-year targets.
Beiersdorf, the maker of Nivea skin creams, slid 1.9 percent to 44.92 euros. Net income rose to 101 million euros ($143 million), from 98 million euros a year earlier, the company said. That fell short of the 115.5 million-euro average estimate of 13 analysts surveyed by Bloomberg.
Beiersdorf lowered its forecast for earnings before interest and taxes to above 10 percent of sales for this year, from an earlier prediction of more than 11 percent.
Adidas AG slid 3.3 percent to 46.50 euros, the first retreat this week. The world’s second-largest sporting-goods maker forecast slower growth in 2011 profit than estimated by analysts.
Earnings per share will rise 10 percent to 15 percent next year, the company said today. That’s less than the 20 percent average estimate of 13 analysts surveyed by Bloomberg in the past 28 days. Adidas also left its 2010 margin forecast unchanged, while reporting a 25 percent gain in third-quarter profit and raising its sales outlook.
Fresenius Medical Care AG dropped 2.5 percent to 43.82 euros, a fourth decline for the longest losing streak since September. The stock was cut to “underperform” from “outperform” at CA Cheuvreux, which said the fact that the world’s biggest provider of kidney dialysis “has still not provided guidance on its 2011 impact creates some uncertainty.”
The following stocks also rose or fell in Germany. Stock symbols are in parentheses:
Bijou Brigitte Modische Accessoires AG (BIJ GY) dropped 1.6 percent to 116.60 euros. The Hamburg-based costume jewelry distributor reported nine-month after-tax profit fell 19 percent to 43.8 million euros, as revenue declined 2.3 percent.
Kuka AG (KU2 GY) climbed 1.8 percent to 15.14 euros, reversing yesterday’s decline. The robot maker said it will supply 225 industrial robots to China’s Huaheng Welding Co. Ltd. The robots will be delivered over the course of 2011, Augsburg, Germany-based Kuka said in an e-mailed statement today.
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