German Stocks Gain Amid Greek Talks; Daimler Shares Jumps After Earnings
German stocks rallied to a six-month high, led by carmakers, as Daimler AG (DAI) reported an increase in profit, and as Greek political leaders announced agreement on austerity measures, clearing the way for a deal to cut the nation’s debt and win its second rescue in two years.
Daimler rose 4.6 percent after the maker of Mercedes-Benz cars and trucks reported fourth-quarter earnings that exceeded estimates. Bayerische Motoren Werke AG (BMW) added 3.7 percent and Volkswagen AG (VOW) rose 2.1 percent. Commerzbank AG (CBK) surged 3.3 percent.
The DAX Index gained 0.6 percent to 6,788.80 at the end of the trading day in Frankfurt, the first increase in four days. The broader HDAX Index added 0.5 percent.
“Discussions between the Greek government and the troika were successfully completed this morning,” Greek Prime Minister Lucas Papademos’s office said in an e-mailed statement today in Athens. “Political leaders have agreed with the result of those negotiations. Therefore there is a general agreement in the context of the new program ahead of tonight’s euro group meeting.” The statement didn’t include any details.
The European Central Bank today left the benchmark interest rate at a record low of 1 percent.
The bank’s president, Mario Draghi, signalled the economic outlook for the euro area has improved, saying it “remains subject to high uncertainty and downside risks,” compared with last month, when he said it was subject to “substantial” downside risk.
Daimler advanced 4.6 percent to 46.68 euros as demand for the revamped M-Class sport-utility vehicle boosted profit. Earnings before interest and taxes climbed to 2.18 billion euros ($2.9 billion) from 1.56 billion euros a year earlier, the Stuttgart, Germany-based company said. That compared with the 2.17 billion-euro average estimate of 12 analysts surveyed by Bloomberg. Daimler proposed a dividend of 2.20 euros for 2011, higher than the previous year’s 1.85 euros.
“The dividend is surprisingly good and higher than the market was expecting,” said Albrecht Denninghoff, a Frankfurt- based analyst with Silvia Quandt Research. “The figures are in line, while the outlook is cautious. We’re staying with our buy recommendation.”
BMW, the world’s biggest maker of luxury cars, gained 3.7 percent to 71.54 euros and Volkswagen rose 2.1 percent to 144.60 euros.
Commerzbank soared 3.3 percent to 2.17 euros, climbing for a third day.
E.ON AG declined 2.2 percent. The energy company was downgraded to “hold” from “buy” at Baader Bank with the 12- month target price at 18 euros a share. RWE AG declined 1.3 percent to 32.10 euros. Germany’s second-largest utility plans to put its Net4Gas unit in the Czech Republic for sale this year, spokesman Martin Chalupsky said in an e-mailed message. Net4Gas operates a network of gas pipelines in the Czech Republic, which is an important transit country in Europe.
Deutsche Boerse AG declined 2.1 percent to 48.96 euros. The U.S. Justice Department said it dismissed an antitrust lawsuit and proposed a settlement agreement with Deutsche Boerse AG and NYSE Euronext because the two exchange owners have abandoned their proposed merger.
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