German Stocks Fall Second Day on China Report; K+S DropsJonathan Morgan
German stocks declined for a second day as China’s services industries expanded at the slowest pace in five months, adding to signs a recovery in the world’s second-biggest economy is moderating.
K+S AG dropped 1.4 percent as Bank of America Corp. downgraded the shares. Baader Bank AG surged to its highest level in more than nine months after reporting a profit for 2012 and projecting growth this year.
The DAX Index retreated 0.2 percent to 7,691.68 at the close of trading in Frankfurt. The gauge has still added 1 percent so far this year as U.S. lawmakers agreed on a budget avoiding automatic fiscal changes that had threatened to push the world’s biggest economy into a recession. The broader HDAX Index also lost 0.2 percent today.
“If we look at the latest statistics for services and manufacturing, the Chinese economy is slowing down,” Ion Marc Valahu, co-founder and fund manager at Clairinvest in Geneva, wrote in a message. “A further tightening in monetary policy risks taking down growth further. The horizon in Europe is getting cloudier by the day, but so far, investors seem to use pullbacks to add to positions.”
The volume of shares changing hands on the DAX was 34 percent less than the average over the past 30 days, according to data compiled by Bloomberg.
China’s services industries expanded last month at the slowest pace since September. The non-manufacturing Purchasing Managers’ Index fell to 54.5 in February from 56.2 in January, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said. A reading above 50 indicates expansion.
The Chinese government has also intensified its three-year campaign to cool the real estate market, ordering larger deposits and stricter enforcement of sales taxes.
In Italy, Democratic Party leader Pier Luigi Bersani’s economic policy spokesman, Stefano Fassina, said the country may have to hold new elections “in a few months” if Bersani fails to build a majority in the Senate.
K+S lost 50 cents to 35.47 euros as Bank of America Corp. downgraded the stock to underperform, the equivalent of a sell rating, from neutral.
Europe’s biggest potash distributor has limited capacity for growth until its unit in Canada ramps up production in 2015, according to Bank of America, which predicted that 2013 capital expenditure will rise to 1.1 billion euros ($1.4 billion).
Metro AG retreated 6.2 percent to 21.14 euros as Citigroup Inc. cut its forecast price for Germany’s largest retailer to 15 euros from 19 euros, reiterating a sell recommendation. The shares slid on Friday after Metro cut its full-year dividend 26 percent and reported earnings that missed analysts’ estimates.
Volkswagen AG fell 0.9 percent to 162.55 euros as a report from the Kraftfahrt-Bundesamt showed new car registrations in Germany fell 10.5 percent in February from a year earlier. The number of new Volkswagen cars registered declined 14.6 percent.
Daimler AG, the third-largest maker of luxury cars, slid 1.5 percent to 44.99 euros. A gauge of European carmakers was among the biggest fallers in the 19 industry groups on the Stoxx Europe 600 Index.
Deutsche Bank AG, Germany’s largest lender, retreated 1.3 percent to 33.15 euros, following a measure of European banks lower.
Baader Bank advanced 5.8 percent to 2.20 euros, its highest price since May 14, as it reported profit after taxes of 8.8 million euros for 2012 and forecast growth in 2013 and 2014.