German Stocks Extend Seven-Week High; ThyssenKrupp Gains
German stocks advanced for a third day, extending a seven-week high, amid speculation of more central bank stimulus measures and as U.S. factory orders topped economists’ forecasts.
ThyssenKrupp AG (TKA), Germany’s largest steelmaker, led gains, surging 4.2 percent. Deutsche Lufthansa AG (LHA), Europe’s second- biggest airline, rallied 1.9 percent as Goodbody Stockbrokers recommended shares of the region’s flag carriers. Volkswagen AG climbed 2.8 percent as U.S. auto sales exceeded forecasts.
The DAX Index added 1.3 percent to 6,578.21 at the close of trading in Frankfurt, the highest since May 11. The measure rallied 2.4 percent last week after European Union leaders meeting in Brussels agreed to ease repayment rules for Spanish banks and relaxed conditions for possible aid to Italy. The broader HDAX Index also rose 1.3 percent today.
“This is a relief rally,” said Ion-Marc Valahu, co- founder and fund manager at Clairinvest in Geneva. “The summit put a floor to the market. The DAX could push up to about the 6,800 mark, then we need the fundamentals to come back on track to show that the world economy can get back on its feet.”
The European Central Bank and the Bank of England announce interest-rate decisions on July 5. ECB officials will lower their benchmark rate by 25 basis points to a record low 0.75 percent, according to the median forecast in a Bloomberg survey of 62 economists. Five predict a cut of 50 basis points and 11 foresee no change.
China may cut reserve requirement ratios for banks three more times in 2012, each by 0.5 percentage points, Shanghai Securities News reported on its website, citing a development report released by the China Banking Association today.
U.S. factory orders gained 0.7 percent in May, recovering from the first back-to-back declines in March and April in more than three years. The increase in bookings followed a revised 0.7 percent drop in April, the Commerce Department said today. The median forecast of economists in a Bloomberg survey called for a rise of 0.1 percent.
ThyssenKrupp advanced 4.2 percent to 13.76 euros, for the biggest five-day rally since November. Salzgitter AG, Germany’s second-largest steelmaker, rose 2.6 percent to 33.13 euros.
Lufthansa increased 1.9 percent to 9.28 euros, the highest price since May 7. There is a positive backdrop for the airline industry as a result of declining fuel prices, “resilient” economic strength for premium traffic outside the European Union and signs of stabilization in the cargo industry, according to Goodbody Stockbrokers in Dublin.
Volkswagen, Europe’s largest carmaker, rose 2.8 percent to 127.95 euros. Bayerische Motoren Werke AG (BMW), the biggest maker of luxury cars, advanced 2.7 percent to 58.94 euros.
General Motors Co., Ford Motor Co. and Chrysler Group LLC said U.S. auto sales exceeded estimates in June as gains for the three carmakers and Nissan Motor Co. surprised analysts by surpassing projections.
Beiersdorf AG (BEI), the German producer of Nivea skin creams, jumped 2.2 percent to 52.44 euros as Sanford C. Bernstein & Co. said European makers of household products are likely to benefit from currency fluctuations in 2012.
BASF SE (BAS), the world’s largest chemical maker, advanced 2.3 percent to 56.50 euros. BASF agreed to buy Malcolm, Iowa-based ITWC Inc. to strengthen its polyurethanes business.
Metro AG (MEO), Germany’s biggest retailer, increased 1.8 percent to 23.58 euros, a third day of gains.
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