German Stocks Gain After Unemployment Drops; BASF Climbs
German stocks advanced after a report showed the nation’s unemployment fell the most in two years, signaling strengthening confidence among companies in Europe’s largest economy.
Commerzbank AG (CBK) and Deutsche Bank AG (DBK) rose more than 3 percent each, posting the largest gains in the DAX Index as lenders led stock increases in Europe. BASF SE (BAS) rose 2.8 percent after UBS AG recommended buying the shares. Hugo Boss AG (BOSS) fell 2.3 percent after Societe Generale SA lowered its stock rating.
The DAX climbed 0.8 percent to 9,506.20 at the close of Frankfurt trading. The index 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 economic stimulus boosted investor confidence on the U.S. recovery. The broader HDAX Index rose 0.8 percent today.
“The German economy is going very well,” said Yves Marcais, an equity-sales trader at Global Equities in Paris. “Investors seem very confident about the banking sector.”
The number of people out of work decreased by a seasonally-adjusted 15,000 in December, the Federal Labor Agency said. That was the first drop in five months and compared with a median economist forecast for a 1,000 decline in a Bloomberg survey. The adjusted jobless rate remained at 6.9 percent.
Commerzbank surged 6 percent to 12.41 euros, and Deutsche Bank climbed 3 percent to 35.56 euros. Lenders in the Stoxx Europe 600 Index rallied 2.9 percent for the biggest jump among 19 industry groups.
BASF advanced 2.8 percent to 78.52 euros. UBS upgraded the shares to buy from neutral, saying “robust” earnings growth will resume. The brokerage added the world’s largest chemical maker to its list of top European calls.
Hugo Boss fell 2.3 percent to 100.00 euros. Societe Generale cut the retailer’s rating to hold from buy, saying expansion in the Asia-Pacific region might take time to materialize.
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