German Stocks Decline on Ukraine Tension as Allianz Slips
German stocks dropped for a third day as tension escalated in Ukraine’s Crimea region after gunmen occupied government buildings and raised a Russian flag.
Allianz SE (ALV) lost 2.3 percent after Europe’s largest insurer reported quarterly profit that rose less than analysts had projected. TAG Immobilien AG (TEG) slipped 2.3 percent after the property owner’s 2013 pretax earnings fell and its dividend missed estimates. Hochtief AG (HOT) and ProSiebenSat.1 Media AG (PSM) rose more than 1.6 percent each after forecasting that profit will climb this year.
The DAX dropped 0.8 percent to 9,588.33 at the close of trading in Frankfurt, its lowest level in two weeks. That pared this month’s advance for the German equity benchmark gauge to 3 percent. The broader HDAX Index slid 0.7 percent today.
“News of military movements in Russia and people taking public offices in the Crimea is weighing on sentiment today,” Francois Savary, who oversees about $9.5 billion as chief investment officer at Reyl & Cie., said by phone from Geneva. “With geopolitical tensions rising and economic data in the U.S. still unclear, investors are stepping back to reassess their strategies.”
In Ukraine, deputies were let into the legislature in Simferopol and agreed to hold a May 25 referendum on the territorial status of Crimea, home to Russia’s Black Sea fleet, Interfax reported. Lawmakers confirmed opposition leader Arseniy Yatsenyuk as interim prime minister after the ouster of Viktor Yanukovych. Russia ordered a series of surprise military exercises along its border with Ukraine late yesterday.
A report from Germany’s Federal Labor Agency showed that the number of people out of work in Europe’s largest economy fell by 14,000 this month, more than the 10,000 drop that economists had forecast. The unemployment rate held at 6.8 percent, a two-decade low.
Allianz lost 2.3 percent to 128 euros. Net income increased to 1.26 billion euros ($1.73 billion) in the fourth quarter from 1.24 billion euros in the year-earlier period, the Munich-based company said in a statement. That was less than the 1.31 billion-euro average estimate in a Bloomberg survey.
TAG Immobilien fell 2.3 percent to 9.43 euros after posting pretax profit of 23.1 million euros for last year, compared with 202.6 million euros in 2012. The company said it will increase its dividend to 35 euro cents a share, from the prior year’s 25 cents. That fell short of a projected payout of 40 cents, according to Bloomberg dividend calculations.
Metro AG (MEO) lost 3.2 percent to 30.35 euros as the Russian ruble weakened to its lowest level since March 2009. The retailer relied on Russia for 8.8 percent of sales in 2013, data compiled by Bloomberg show.
SMA Solar Technology AG (S92), Germany’s largest solar company, fell 6 percent to 43.96 euros. The stock jumped 13 percent yesterday to a two-year high after agreeing to sell a 20 percent stake to Danfoss A/S.
Hochtief added 3.9 percent to 68.20 euros, its highest price in three months. The builder forecast net income excluding restructuring costs will reach 225 million euros to 250 million euros in 2014. Profit on that basis rose to 208 million euros in last year, according to a statement.
ProSiebenSat.1 rose 1.6 percent to 34.08 euros. The broadcaster said 2014 sales will increase by a mid-to-high single-digit percentage from last year’s 2.61 billion euros. The average analyst estimate calls for a 6.5 percent increase in revenue to 2.78 billion euros, data compiled by Bloomberg show. Net income and recurring earnings before interest, taxes, depreciation and amortization will also rise, the company said.
Lanxess AG (LXS) added 1.5 percent to 54.19 euros as Hauck & Aufhaeuser Privatbankiers KGaA raised its rating on the stock to buy from hold, citing improving an improving economic environment in Europe and rising tire sales. Lanxess fell the most in a month yesterday after saying impairment charges led to a 2013 net loss.
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