German Stocks Decline for Third Day; Deutsche Bank FallAdria Cimino
German stocks fell for a third day as a report sparked concern a rescue plan for Cyprus that involves shrinking its banking system may set a precedent for other euro-area lenders.
Deutsche Bank AG and Commerzbank AG paced declines in the DAX Index. Bayer AG advanced 1 percent after Japan and Canada approved its cancer drug.
The DAX Index dropped 0.5 percent to 7,870.9 at the close of trading in Frankfurt, after earlier rising as much as 1.5 percent. The measure slid last week for the first time in a month. The gauge has still rallied 3.4 percent so far this year as U.S. lawmakers agreed on a budget and American jobs data beat estimates. The broader HDAX Index retreated 0.4 percent today.
Cyprus agreed with euro-area finance ministers to shrink its banking system in exchange for a 10 billion-euro ($13 billion) bailout. President Nicos Anastasiades agreed to shut the country’s second-largest bank under pressure from a German-led bloc of creditors.
“This is the first time a euro-zone bank has gone bankrupt,” Frederic Hamm, who helps oversee $325 million as fund manager at Iris Finance SA in Paris, said about the Cyprus bailout. “The European Central Bank is leaving that possibility. That’s not a very good sign.”
The revised accord spares bank accounts with less than the insured limit of 100,000 euros. A loss of no more than 40 percent will be imposed on uninsured depositors at the Bank of Cyprus, two European Union officials said. Uninsured depositors at Cyprus Popular would largely be wiped out, two other officials said.
Stocks erased earlier gains after Reuters reported that Eurogroup chairman Jeroen Dijsselbloem said the Cyprus bank restructuring plan should be seen as an example for the rest of the euro area.
Deutsche Bank, Germany’s biggest bank, lost 3.2 percent to 31.37 euros. Commerzbank, the second-largest, fell 1.7 percent to 1.16 euros. The group of lenders in the Stoxx Europe 600 Index dropped 1.9 percent, reversing earlier gains, for the worst performance on the gauge.
Lanxess AG slipped 2.1 percent to 54.49 euros. Baader Bank cut its recommendation on shares of the chemical company to hold from buy, citing the company’s revision of its outlook. Lanxess on March 21 forecast a larger-than-estimated drop in profit for the current quarter.
Bayer advanced 1 percent to 79.10 euros. The drugmaker said Canada approved its Stivarga medicine for metastatic colon cancer. Japan has also approved the treatment for colorectal cancer, the company said.
Aixtron SE, the maker of equipment for the semiconductor industry, increased 7.2 percent to 11.20 euros. Exane BNP rated the stock outperform, a recommendation similar to buy, saying it expects a recovery in the demand for metal organic chemical vapor deposition, or MOCVD, equipment.
Hochtief AG rose 1.6 percent to 52.23 euros. Leighton Holdings Ltd., Australia’s largest construction company, appointed Bob Humphris as chairman after his predecessor resigned in a dispute with shareholder Hochtief over board independence.
The number of shares changing hands in the index was 11 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.