German Stocks Little Changed as Service Industries Slow
German stocks were little changed, following their decline last week, as reports showed service-industry activity slowed in Europe’s largest economy even as it expanded for a fifth month in the wider euro zone.
Commerzbank AG (CBK) advanced 3.7 percent, the biggest gain on the DAX Index (DAX), as Euro am Sonntag reported that it plans to expand its domestic wealth-management services. Dialog Semiconductor Plc (DLG) slid 4.7 percent after Morgan Stanley cut its rating for the maker of chips used in Apple Inc.’s iPhone.
The DAX retreated 0.1 percent to 9,428 at the close in Frankfurt after rising as much as 0.4 percent and falling as much as 0.4 percent. The equity benchmark declined 1.6 percent last week. It rallied 25 percent in 2013 as the European Central Bank pledged to keep interest rates low for a prolonged period and the Federal Reserve’s decision to slow the pace of its bond-buying program increased investors’ confidence in the U.S. economic recovery. The HDAX Index lost 0.2 percent today.
“After the small correction we had last week, investors are trying to rediscover their confidence,” John Plassard, vice president at Mirabaud Securities LLP in Geneva, said in a telephone interview. “There is a belief among some investors that the index will repeat its rally of January last year, before retreating the following month.”
The DAX climbed 2.2 percent in the first month of 2013. The gauge dropped 0.4 percent in the following month.
Markit Economics’ gauge of German service industries dropped to 53.5 last month from 55.7 in November. The median economist estimate had called for a reading of 54, according to data compiled by Bloomberg. Figures greater than 50 mean that activity increased. Markit’s measure of services in the euro area slowed to 51 in December from 51.2 in November.
Commerzbank climbed 3.7 percent to 11.71 euros. Germany’s second-biggest bank aims to profit from the withdrawal of several Swiss competitors from the private-banking market in Germany, Euro am Sonntag reported. The newspaper interviewed the head of the Commerzbank unit, Gustav Holtkemper.
QSC AG (QSC) jumped 7.1 percent to 4.57 euros. The Frankfurter Allgemeine Sonntagszeitung reported that the technology-outsourcing company had revenue of at least 450 million euros ($614 million) in 2013 and a profit margin of 17 percent or more. The newspaper interviewed Chief Financial Officer Barbara Stolz.
Dialog Semiconductor fell 4.7 percent to 14.95 euros after Morgan Stanley lowered the company to underweight, which is similar to a sell rating. The brokerage forecast a weak first half of 2014 and predicted that Dialog’s margins will be little changed for the year. The bank cut its projected price for the shares to 11 euros from 12 euros.
The volume of shares changing hands in DAX-listed companies was 22 percent lower than the average of the past 30 days, data compiled by Bloomberg showed.
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