German Stocks Advance, Extending a Five-Year HighJonathan Morgan
German stocks advanced, extending their highest level in more than five years, as Henkel AG and Lanxess AG climbed.
Henkel rose for a second day as the maker of Loctite glue and Persil detergent predicted that sales will grow and profitability will increase in 2013. Axel Springer AG fell the most since May 2010 as Europe’s largest newspaper publisher forecast lower profit for this year.
The DAX Index rallied 0.6 percent to 7,919.33 at the close of trading in Frankfurt, its highest level since January 2008. The equity benchmark has gained 4 percent this year as U.S. lawmakers agreed on a budget avoiding most automatic fiscal changes that had threatened to push the world’s biggest economy into a recession. The broader HDAX Index rose 0.5 percent today.
“The current situation on the trading floor is affected by a strong momentum due to the immense liquidity, which must be invested,” Roger Peeters, chief executive officer at Close Brothers Seydler Research in Frankfurt, wrote in e-mailed comments. “The technical situation is leading to further interest by investors with a low exposure or short sellers, who will be squeezed.”
U.S. stocks rallied yesterday, pushing the Dow Jones Industrial Average 126 points higher to close at an all-time high of 14,253.77.
In the U.S., orders to factories fell in January as demand for military hardware and commercial aircraft slumped. Bookings dropped 2 percent after a revised 1.3 percent increase in December, figures from the Commerce Department showed today. Economists had projected a 2.2 percent decline, according to the median forecast in a Bloomberg survey.
Henkel added 2.4 percent to 70.33 euros after predicting that sales will grow as much as 5 percent in 2013. The company’s earnings before interest and taxes as a proportion of sales will rise to as much as 14.5 percent this year, more than the 14.1 percent margin that Henkel reported today for 2012.
Lanxess increased 2.5 percent to 66.89 euros, posting the biggest gain on a gauge of European chemical makers. Macquarie Bank Ltd. raised the stock to outperform from neutral, meaning that investors should hold more of the shares than are represented in benchmark indexes.
Macquarie said that the improving cycle for butadiene -- a feedstock for synthetic rubber that accounts for about 30 percent of Lanxess’s total raw-material bill -- indicates that profitability will increase.
Deutsche Boerse AG climbed 1.4 percent to 49.20 euros after Platow Brief reported that the operator of the Frankfurt stock exchange has hired a chief lobbyist to build its contacts with the government. The report cited unidentified people close to Deutsche Boerse.
Allianz, Munich Re
Allianz SE, Europe’s largest insurance company, and Munich Re, the world’s biggest reinsurer, gained 2.2 percent to 109 euros and 2.2 percent to 143.45 euros, respectively.
Axel Springer slid 5.9 percent to 34.13 euros as the publisher of Bild and Die Welt forecast profit will fall this year because of spending to accelerate its shift to digital publications. Earnings before interest, taxes, depreciation and amortization will probably drop by less than 10 percent, Berlin-based Axel Springer said. Analysts had projected Ebitda would rise 4.1 percent to 654 million euros ($850 million) from 628 million euros in 2012, data compiled by Bloomberg show.
IVG Immobilien AG sank 20 percent to 1.84 euros, its largest drop in more than four years, as the real estate investor reported a net loss of 98.7 million euros, wider than its own forecast. The company also said it won’t pay a dividend. Baader Bank AG downgraded the shares to sell from buy.