German Stocks Advance as Euro-Area Finance Ministers MeetJonathan Morgan
German stocks advanced to their highest in more than two weeks as euro-area finance ministers meet for the first time this year, and the Bundesbank said Europe’s largest economy is showing signs of recovery.
EON AG and RWE AG, Germany’s biggest utilities, gained 1.6 percent and 0.9 percent, respectively. Deutsche Lufthansa AG rose 4 percent as Credit Suisse Group AG raised its price target on the carrier. Adidas AG slipped 0.9 percent as a gauge of personal and household goods companies fell the second most among the 19 industry groups in the Stoxx Europe 600 Index.
The DAX Index climbed 0.6 percent to 7,748.86 at the close of trading in Frankfurt, its highest level since Jan. 4. The gauge has increased 1.8 percent so far this year as U.S. lawmakers agreed on a compromise budget to prevent most scheduled tax increases and delay spending cuts that had threatened to push the world’s largest economy into a recession. The HDAX Index added 0.5 percent today.
“European policy has learnt that we have to show stability,” Robert Halver, head of capital markets research at Baader Bank AG in Frankfurt, said in a telephone interview. “Even today with the finance ministers meeting we will not have any disruptions, there will be harmony.”
The volume of shares changing hands on the DAX was 41 percent lower than the average of the last 30 days, data compiled by Bloomberg show.
Euro-area finance ministers, gathering in Brussels today, will begin talks on how to channel firewall funds directly to banks. Policy makers will probably clash over how and when the 500 billion-euro European Stability Mechanism can bypass governments. They will also assess the economies of Spain, Cyprus and Greece.
The Bundesbank said the German economy has started to show signs of recovery after a probable contraction in the final quarter of last year.
“The largely stable labor market and a better outlook for output suggest that the economic weakness won’t last all that long,” the Frankfurt-based central bank said in its monthly report today. A recovery “is already appearing in the first quarter of 2013,” it said.
The Bank of Japan will expand asset purchases when its meeting concludes tomorrow, according to all 23 economists in a Bloomberg survey. Their median estimate projects a 10 trillion yen ($111 billion) increase.
The yen has weakened 12 percent versus the U.S. dollar in the past three months on speculation Japan’s central bank, under pressure from new Prime Minister Shinzo Abe, will increase stimulus.
EON AG and RWE AG added 1.6 percent to 14.07 euros and 0.9 percent to 29.32 euros, respectively. A gauge of utilities companies posted the second-biggest gain of the 19 industry groups in the Stoxx 600.
Lufthansa gained 4 percent to 15.02 euros. Credit Suisse raised its price target on Europe’s second-largest airline by 28 percent to 18.06 euros and said it was its preferred European flag carrier because of its attractive valuation and earnings potential for this year.
BASF SE advanced 0.9 percent to 73.81 euros. The world’s biggest chemical maker, which raised its bid for Pronova BioPharma ASA three days before the offer expired, won almost 98 percent support from the Norwegian drug-ingredient maker’s shareholders, enough for the acquisition to go through.
Salzgitter AG, the country’s second-biggest steelmaker, added 2.8 percent to 37.10 euros as a gauge of basic resources companies contributed the most to the Stoxx 600’s advance.
Adidas, the world’s second-biggest sporting-goods maker, lost 0.9 percent to 69.98 euros.
Sky Deutschland AG lost 5.3 percent to 4.50 euros. The pay-TV provider half-owned by Rupert Murdoch’s News Corp. earlier announced it will issue as many as 20.4 million new shares at 4.46 euros apiece and forecast a full-year loss of between 48 million euros and 58 million euros, compared with an earlier prediction of a 46 million-euro loss.