German Stocks Rise, Snapping Six-Day Drop; Daimler Gains
German stocks advanced, after the benchmark index posted its longest losing streak since November 2011, as Italy elected a president, and the Bank of Japan’s stimulus policies were unopposed at a Group of 20 meeting.
Daimler AG (DAI) added 1.8 percent as a gauge of European carmakers rose. SMA Solar Technology AG rallied 4.7 percent as Switzerland’s ABB Ltd. agreed to acquire Power-One Inc. for about $1 billion. Commerzbank AG (CBK) slid to a record low after Bankhaus Metzler cut its rating on the shares. K+S AG fell to a five-month low after delaying the start of a new plant.
The benchmark DAX rose 0.2 percent to 7,478.11 at the close of trading in Frankfurt, snapping six days of declines. The measure dropped 3.7 percent last week amid a slump in commodity prices and as disappointing economic reports from the U.S. and China bolstered concern that a global recovery is faltering. The broader HDAX Index gained 0.3 percent today.
“This is good news; he is a trustworthy person and he will likely try to form again a government of technicians,” Giacomo Chiorino, a strategist at Banca Patrimoni Sella & C. in Biella, Italy, said in a phone interview, referring to the re-election of Giorgio Napolitano as Italy’s president. “All the economic and political problems are still there, but at least we are in a better position than last Friday.”
Napolitano was elected to a second term after accepting a last-minute appeal from party leaders to run again. The 87-year- old incumbent won the backing of parties led by former premier Silvio Berlusconi, caretaker Prime Minister Mario Monti and outgoing Democratic Party leader Pier Luigi Bersani. His re- election came two months after inconclusive elections.
BOJ Governor Haruhiko Kuroda emerged from the G-20 meeting saying he was emboldened to press ahead with the campaign to defeat deflation. The central bank meets this week after pledging April 4 to double the monetary base in two years.
Shares pared gains of as much as 1.1 percent after a report showed sales of previously owned U.S. homes unexpectedly dropped in March. Purchases fell 0.6 percent to a 4.92 million annual rate last month, figures from the National Association of Realtors showed today in Washington. The median forecast of 75 economists surveyed by Bloomberg projected sales would increase to a 5 million rate.
“The market is worrying about the state of the world economy,” said Philippe Gijsels, a strategist at BNP Paribas Fortis in Brussels, in a phone interview. “I would not call this a classical risk-off move, what I see is more fear of a slowdown in the developed world.”
Daimler, the world’s third-largest maker of luxury cars, rose 1.8 percent to 39.53 euros. Volkswagen AG added 0.8 percent to 142.10 euros and Bayerische Motoren Werke AG climbed 0.6 percent to 65.24 euros, following a gauge of carmakers higher on the Stoxx Europe 600 index.
SMA Solar surged 4.7 percent to 18.32 euros. ABB agreed to buy Power-One to expand in inverters that allow solar power to be fed into grids. Solarworld AG climbed 2.4 percent to 69.3 euro cents.
Commerzbank dropped 4.5 percent to 1.09 euro, a record low. Guido Hoymann, an analyst at Metzler, cut his price estimate on Germany’s second-biggest lender to 1.10 euro from 1.30 euro, saying it will struggle to boost earnings amid intensifying competition. He also forecast cumulative losses of 2.7 billion euros ($3.5 billion) in the next four years from real-estate and shipping loans.
K+S lost 3.7 percent to 32.36 euros. Europe’s largest potash maker said it delayed the start of a new plant in Saskatchewan, Canada, by about six months as spending on the project will exceed target by 26 percent.
The volume of shares changing hands in DAX (DAX) companies was 4.2 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
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