German Stocks Decline for Third Day Amid Ukraine Tensions
German stocks fell for a third day as concern grew the Ukraine conflict will lead to a trade war between Russia and the West, offsetting better-than-estimated earnings from Deutsche Lufthansa AG. (LHA)
Fresenius Medical Care AG declined the most in more than two months after posting first-quarter net income and revenue that missed projections. Deutsche Bank AG fell to a one-year low after Moody’s Investor Service put its credit rating on review for a possible downgrade. Lufthansa gained 3 percent after reporting a narrower first-quarter loss than analysts estimated.
The DAX Index (DAX) dropped 0.7 percent to 9,467.53 at the close in Frankfurt, as investors awaited Federal Reserve Chair Janet Yellen’s testimony before the Joint Economic Committee tomorrow and the European Central Bank’s interest-rate decision on Thursday. The equity gauge has lost 2.8 percent from a record on Jan. 17 as Russia annexed Crimea and the European Union responded with sanctions. The HDAX Index slid 0.6 percent today.
“The situation in Ukraine seemed to deteriorate further,” Anthony Ip and Jim Reid, strategists at Deutsche Bank AG, wrote in a note. “Many are taking a wait-and-see approach to events on the near-term horizon including Yellen’s JEC testimony on Wednesday, the ECB on Thursday and the potential for the conflict in Ukraine to intensify from already-heightened levels.”
In Ukraine, acting Interior Minister Arsen Avakov said on his Facebook account that insurgents killed four government troops and brought down a military helicopter. The fighting may have killed about 30 pro-Russian separatists, he said. Ukraine holds a presidential election on May 25.
Fresenius Medical Care lost 2.6 percent to 47.89 euros. The world’s largest kidney-dialysis provider posted first-quarter net income of $205 million and revenue of $3.56 billion. That trailed analysts’ projections for profit of $230.3 million and sales of $3.61 billion.
Deutsche Bank dropped 2.4 percent to 30.53 euros. The lender, which last week reported a decline in quarterly earnings, faces challenges in stabilizing profitability and generating acceptable shareholder returns, Moody’s analyst Peter Nerby said in a statement.
Lufthansa rose 3 percent to 18.15 euros after Europe’s second-largest carrier said its first-quarter operating loss narrowed to 245 million euros ($342 million). Analysts on average had predicted 283.4 million euros. Lufthansa reiterated its full-year operating-profit forecast of 1.3 billion euros to 1.5 billion euros.
DMG Mori Seiki AG rallied 8.5 percent to 24.81 euros, its biggest gain in six months. The machine-tools maker posted first-quarter revenue of 505.1 million euros, exceeding the average analyst prediction of 495.4 million euros. Chief Executive Officer Ruediger Kapitza predicted the company will start production at its plant in Ulyanovsk, Russia, in 2015 and said that growth plans in the nation will not be affected by geopolitical tensions.
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