German Stocks Rise to Five-Year High as Leaders GatherJonathan Morgan
German stocks advanced to a five-year high, with the benchmark DAX Index surpassing 8,000 points, as European leaders gathered for a two-day summit in Brussels, and as U.S. initial jobless claims unexpectedly fell.
HeidelbergCement AG rose to its highest in more than four years after saying debt declined more than forecast last year. K+S AG climbed to its highest price in more than four months after it predicted earnings and sales will rise this year.
The DAX gained 1.1 percent to 8,058.37 at the close of trading in Frankfurt, its highest level since December 2007. The measure has rallied 5.9 percent this year amid optimism central banks around the world will continue to support economic growth. The broader HDAX Index rose 1 percent today.
“Markets remain obviously in a bullish trend,” Roger Peeters, chief executive officer at Close Brothers Seydler Research in Frankfurt, wrote in an e-mail. “In Germany, it still seems to be only a question of time before we see a new all-time high on the DAX.”
The volume of shares changing hands on the benchmark index was 91 percent greater than the average of the last 30 days, data compiled by Bloomberg show.
European leaders gathered for a two-day summit in Brussels today, with euro-area finance ministers meeting separately tomorrow to discuss a bailout for Cyprus. Policy makers may loosen austerity measures as the recession and mounting unemployment in southern Europe overtake the debt crisis as the region’s biggest threat.
The number of Americans filing applications for unemployment benefits unexpectedly dropped last week to the lowest level in almost two months. First-time jobless claims fell by 10,000 to 332,000 in the week ended March 9, the fewest since mid-January, according to data today from the Labor Department in Washington. The median forecast of 49 economists surveyed by Bloomberg called for an increase to 350,000.
HeidelbergCement climbed 3 percent 56.22 euros, its highest price since October 2008. The company’s debt fell in 2012 more than analysts forecast as improved earnings covered dividends and repayments, bringing it closer to reclaiming investment grade status.
K+S added 1.9 percent to 36.73 euros, its highest price since Oct. 18. Europe’s largest potash maker has “experienced a very decent start into the new business year,” Chief Executive Officer Norbert Steiner said on the company’s website.
Deutsche Lufthansa AG rose 3.6 percent to 16.05 euros, its highest price since January 2011. Europe’s second-biggest airline agreed to renew its short-haul fleet with 100 mostly fuel-efficient jets from Airbus SAS, as it seeks to cut kerosene costs that constitute its single biggest expense.
Deutsche Wohnen AG added 5.3 percent to 14.38 euros. Goldman Sachs Group Inc. upgraded its recommendation on the shares to buy, saying Germany’s largest residential landlord by market value will benefit from strong rent increases in its core markets.
GSW Immobilien AG advanced 3.4 percent to 31.90 euros. Goldman upgraded the real estate company formerly owned by Cerberus Capital Management LP to buy, citing its focus on Berlin and the rents from recent acquisitions.
LEG Immobilien AG, which completed the largest initial public offering for a German property company, climbed 0.6 percent to 42 euros. Goldman upgraded the shares to buy, adding the company to its conviction list.
Wacker Chemie AG slipped 3.4 percent to 61.34 euros. The maker of the main raw material in solar panels forecast earnings before interest, taxes, depreciation, and amortization in 2013 will be less than in previous years because of lower prices for polysilicon and semiconductor wafers.
Hugo Boss AG lost 2.8 percent to 87.82 euros. The German luxury-clothing maker controlled by buyout firm Permira Advisers LLP said it will spend more in 2013, which it expects to be “challenging.” It forecast operating profit will rise this year after it expanded its store network by a third in 2012.
Volkswagen AG declined 1.1 percent to 164.65 euros. Chief Executive Officer Martin Winterkorn said Europe’s biggest automaker is confronting “tougher competition and difficult economic conditions.” He also said that VW’s earnings this year would match the 2012 figure, and rise in 2014.