German Stocks Advance for Fourth Day as Daimler, Bayer, Munich Re Increase
Exporters to the U.S., including Daimler AG (DAI) and Bayer AG (BAYN), led the advance. Munich Re, the world’s biggest reinsurer, and Sky Deutschland AG (SKYD) also rose. Rhoen-Klinikum AG (RHK) fell before the operator of health-care facilities reports earnings next week.
The DAX (DAX) Index rose 1.7 percent to 6,766.67 at the close in Frankfurt as it posted a weekly advance of 3.9 percent. The DAX has jumped 15 percent this year, gaining the most in January since the benchmark measure started in 1988, amid speculation the global economy will withstand the impact of the euro area’s debt crisis and as central banks acted to fuel growth. The broader HDAX Index (HDAX) also added 1.7 percent today.
“The number shows quantitative easing is working in the U.S. and feeding through to the real economy,” said Carlos Sanchez, sales trader at Interdin Holdings SA in Madrid. “Once employment recovers, we’ll see a very quick improvement in corporate earnings and in the economy. There will be a very quick transfer because the U.S. economy is largely dependent on the consumer.”
In the U.S., a Labor Department report showed that employers hired more people last month than economists had estimated and the jobless rate unexpectedly fell to the lowest in three years. The 243,000 increase in payrolls was the most since April and exceeded every forecast in a Bloomberg News survey. The unemployment rate dropped to 8.3 percent, the lowest since February 2009.
The Stoxx 600 Banks Index has surged 18 percent this year even as Greece continues talks with bondholders for a debt-swap agreement. A rescue plan for the country may include a loss of more than 70 percent for bondholders in a voluntary exchange, people close to the negotiations have said.
“Equity valuations are still extremely cheap,” Philipp Baertschi, strategist at Bank Sarasin & Cie. in Zurich, said in a Bloomberg Television interview. “The multiples are not justified. There is too much gloom.”
Daimler (DAI), the carmaker that makes 24 percent of sales in the U.S., climbed 3.1 percent to 45.46 euros after the jobs report. Bayer (BAYN), maker of the Xarelto blood thinner, advanced 1.4 percent to 55.09 euros. The company generated 23 percent of its revenue from North America in 2010, according to Bloomberg data.
Munich Re (MUV2) gained 2.8 percent to 106.45 euros. Commerzbank AG raised its recommendation on the stock to “buy” from “add,” and its price forecast for the shares to 118 euros from 100 euros.
Sky Deutschland Gains
Sky Deutschland (SKYD), the German pay-television provider controlled by News Corp., rallied 9.3 percent to 2.47 euros. The stock soared 19 percent yesterday after the company reported higher subscriber numbers and predicted positive earnings for 2013.
“With another quarter of strong metrics, and massively reduced losses behind the company, even the skeptics must be wondering if bearishness is still justified,” analysts at Berenberg Bank wrote in a report today. “With an increasingly bright operational future, we remain buyers.”
Rhoen-Klinikum declined 2.8 percent to 15.28 euros. Analysts at Berenberg Bank wrote in a report today that the company may post annual net income of 152 million euros ($199 million) when adjusting for one-time tax gains on Feb. 9. That would be “right at the lower end of the guidance range,” the brokerage wrote.
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