German Stocks Advance as Sentiment Data Beat Forecasts

German stocks rose for a second day as economic sentiment in Europe’s largest economy improved in February more than analysts had forecast.

BASF AG, the world’s biggest chemical manufacturer, led gains on the benchmark DAX Index. Bayer AG rose the most in more than three weeks after saying it has begun new trials on a blindness treatment with Regeneron Pharmaceuticals Inc. Pfeiffer Vacuum Technology AG fell to its lowest in more than two months after posting earnings that missed estimates.

The DAX added 1.6 percent to 7,752.45 at the close of trading in Frankfurt. The benchmark gauge has risen 1.8 percent so far this year as U.S. lawmakers agreed on a budget preventing spending cuts and tax increases that threatened to push the world’s biggest economy into recession. The broader HDAX Index also climbed 1.6 percent today.

“The economic sentiment data was pretty surprisingly positive,” Henrik Drusebjerg a senior strategist at Nordea Bank AB in Copenhagen, where he helps oversee $220 billion, said in a telephone interview. “We see improving economic data, especially from outside Europe. We have an underlying theme of where else should we put our money, in light of the very low interest rates. I guess there are no other alternatives to equities.”

The volume of shares changing hands on the DAX was 4.3 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.

Investor Confidence

German investor confidence jumped in February to the highest in almost three years. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, climbed to 48.2 from 31.5 in January. That’s the highest since April 2010. Economists forecast a gain to 35, according to the median of 38 estimates in a Bloomberg News survey.

BASF gained 3.3 percent to 73.79 euros as a gauge of chemical companies climbed the most among the 19 industry groups in the Stoxx Europe 600 Index.

Bayer advanced 3.6 percent to 71.79 euros, its biggest gain since Jan. 25. The drugs and chemicals maker and Regeneron began a new Phase 3 trial for the Eylea blindness treatment. Bayer said they have extended their global development program after promising results in Phase 2.

MTU Aero Engines Holding AG rose 2.9 percent to 71.08 euros, its biggest gain in five months. Germany’s largest aircraft engine maker said operating profit jumped 14 percent last year, beating its forecast, and boosted its outlook for 2013 on surging commercial engine deliveries.

Kloeckner Stake

Kloeckner & Co. SE, Europe’s largest independent steel trader, added 16 percent to 10.88 euros, its largest increase in almost four years, as Interfer Holding GmbH bought a 7.82 percent stake.

Interfer owns Kloeckner’s rival Knauf Interfer SE, which is planning to expand, and said today in a statement that the deal was a “strategic investment.”

Pfeiffer Vacuum Technology fell 2.8 percent to 87.58 euros, its lowest price since Dec. 3. The service-pumps manufacturer reported earnings before interest and taxes for 2012 of 67.7 million euros ($90.4 million), compared with analysts’ estimates of 70.1 million euros.

Comdirect Bank AG lost 3.6 percent to 8.32 euros after the retail brokerage arm of Commerzbank AG said profit in 2012 fell 34 percent.

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