German Stocks Rise After ECB Decision; Daimler Advances
German stocks rose as European Central Bank President Mario Draghi said an economic recovery should begin later this year, and companies including Daimler AG and HeidelbergCement AG reported earnings.
Daimler climbed 2.8 percent after forecasting unchanged profit for 2013. HeidelbergCement jumped to its highest price in 20 months after earnings and sales beat analysts’ estimates. Deutsche Bank AG and Commerzbank AG paced declining shares.
The DAX Index rose 0.1 percent to 7,590.85 at the close of trading in Frankfurt. The gauge erased its gain for the year yesterday as Spanish and Italian bond yields climbed amid political uncertainty arising from corruption allegations against Premier Mariano Rajoy and the outcome of Italian elections this month. The broader HDAX Index also added 0.1 percent today.
The volume of shares changing hands on the DAX was 11 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.
“Central banks have to walk a thin line between saying things are going well, but not taking away stimulus,” said Philippe Gijsels, head of fixed-income research at BNP Paribas Fortis in Brussels. “They managed very well. The comments were more dovish than last time and that’s probably something the market likes. The overall environment for equities remains positive. Recovery in the euro zone is going to take hold.”
Draghi said an economic recovery should begin later this year as an absence of inflation risks allows the bank to maintain record-low interest rates.
“Later in 2013, economic activity should gradually recover, supported by our accommodative policy stance,” Draghi said at a press conference in Frankfurt after policy makers kept the benchmark rate at 0.75 percent. Inflation risks are contained, allowing the ECB’s policy “to remain accommodative,” and economic weakness will prevail only “in the early part” of this year, he said.
Daimler climbed 1.20 euros to 44.21 euros. The world’s third-largest maker of luxury vehicles forecast unchanged 2013 profit as spending for new models and a revamp of its operations eat into earnings. Earnings before interest and taxes in 2012 from ongoing business fell 10 percent to 8.1 billion euros ($11 billion), the automaker said.
HeidelbergCement advanced 5.1 percent to 48.59 euros, its highest price since May 19, 2011. The world’s third-largest maker of cement reported fourth-quarter profit and sales that beat analysts’ estimates as growth in North America, higher prices and cost-cuts offset weakness in Europe.
Operating profit before depreciation rose 8.2 percent to 691 million euros, the company said. The average estimate of 11 analysts in a Bloomberg survey was 644 million euros. Sales jumped 6.5 percent to 3.5 billion euros, versus an estimated 3.42 billion euros.
Lanxess AG climbed 3.7 percent to 63.61 euros, its biggest gain since Nov. 19, with speculation about a Dow Chemical Co. bid highlighting a belief among some investors that the synthetic-rubber maker is a takeover target. Lanxess spokesman Daniel Smith and Dow Chemical spokeswoman Rebecca Bentley both declined to comment on takeover talk.
Speculation that Dow is willing to pay 70 euros to 80 euros per share for Lanxess doesn’t make sense because Dow has an extensive capital expenditure program already and there is very little overlap in the companies’ businesses, said Jaideep Pandya, an analyst at Berenberg Bank AG.
Saudi Basic Industries Corp., also known as Sabic, LG Chem Ltd. and Reliance Industries Ltd. may consider buying Lanxess, Jaideep said.
Hamburger Hafen & Logistik AG rallied 5.2 percent to 19.08 euros. The largest container handler at Hamburg’s port reported 2012 preliminary revenue and earnings before interest and taxes that met its forecast as throughput rose more than expected.
Hannover Re, the world’s fourth-biggest reinsurer, slipped 3 percent to 56.40 euros. Berenberg Bank cut its recommendation on the world’s fourth-biggest reinsurer to hold, citing “relatively downbeat” January renewals.
Wacker Chemie AG, the fourth-biggest maker of polysilicon, slid 1.9 percent to 54.77 euros even after posting quarterly profit that beat analyst estimates. Citigroup Inc. forecast a challenging 2013 for the polysilicon business.
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