German Stocks Rally to Post Biggest Weekly Gain of 2013

German stocks advanced for a fourth day, extending a five-year high, as U.S. payrolls increased more than forecast in February, leading to an unexpected drop in the unemployment rate in the world’s largest economy.

Infineon Technologies AG climbed 5.6 percent after Texas Instruments Inc. raised the lower end of its forecasts for first-quarter sales and profit. Merck KGaA jumped to its highest price ever after Independent Research GmbH upgraded the shares. ElringKlinger AG fell the most in more than four years.

The DAX Index rose 0.6 percent to 7,986.47 at the close of trading in Frankfurt. The benchmark gauge rallied 3.6 percent this week -- reaching its highest level since December 2007 -- on optimism central banks around the world will continue to support economic growth. The broader HDAX Index gained 0.5 percent today.

“It seems like almost nothing can frighten investors for the time being,” Roger Peeters, chief executive officer at Close Brothers Seydler Research in Frankfurt, wrote in an e-mail. “The liquidity pressure is still strong enough to bring the markets to new spheres this morning.”

The volume of shares changing hands on the DAX was 3 percent higher than the average of the last 30 days, data compiled by Bloomberg show.

Jobs Surprise

U.S. payrolls increased more than forecast in February and the jobless rate unexpectedly fell to a four-year low of 7.7 percent, data showed today.

Employment rose 236,000 last month after a revised 119,000 gain in January that was smaller than first estimated, Labor Department figures showed. The median forecast of 90 economists surveyed by Bloomberg projected an advance of 165,000. The jobless rate dropped from 7.9 percent.

In Japan, gross domestic product rose an annualized 0.2 percent in the fourth quarter, the Cabinet Office said in Tokyo. That compares with a preliminary calculation of a 0.4 percent contraction.

In China, exports rose 22 percent in February from a year earlier, the customs administration said. That beat the 8.1 percent median estimate in a Bloomberg News survey.

German industrial production unexpectedly stagnated in January, a report showed today. Production was unchanged from December, when it increased a revised 0.6 percent, the Economy Ministry in Berlin said. Economists in a Bloomberg survey had forecast a 0.4 percent gain for January.

Infineon, Merck

Infineon Technologies, Europe’s second-biggest semiconductor maker, gained 5.6 percent to 6.85 euros after Texas Instruments, the world’s largest analog-chip maker, raised its forecasts.

Commerzbank AG said it is the right time to buy Infineon shares as investors underestimate growth in auto, mobile-devices and computing segments.

Merck KGaA, the maker of the cancer drug Erbitux, advanced 1.9 percent to 114.35 euros as Independent Research upgraded the shares to hold from sell. A close at this price would be the highest for the stock since Merck sold shares to the public in 1995.

Commerzbank and Deutsche Bank AG, Germany’s two biggest lenders, added 2.1 percent to 1.45 euros and 1.8 percent to 34.58 euros respectively as a gauge of banking stocks climbed the most among the 19 industry groups in the Stoxx Europe 600 Index, rising 2.6 percent.

ElringKlinger tumbled 14 percent to 24.13 euros after the auto-parts maker said fourth-quarter net income fell to 13.2 million euros. The company will publish the full results March 28.

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