German Stocks Fall as Chinese Growth Misses ForecastsAlexis Xydias
German stocks declined for a second day as a report showed China’s economy grew at a slower pace in the first quarter than forecast, and a gauge of manufacturing in the New York region expanded less than expected in April.
Continental AG fell 1.2 percent after quarterly sales dropped more than it estimated. Siemens AG declined to its lowest price since Feb. 27 after its chief financial officer said underperforming projects will hurt earnings. Infineon Technologies AG extended Friday’s selloff, retreating to its lowest price since November.
The DAX Index lost 0.4 percent to 7,712.63 at the close of trading in Frankfurt. The broader HDAX Index retreated 0.5 percent. Stocks on Friday snapped a two-day rally after Cyprus was said to seek an increase in bailout funds and a report showed and U.S. retail sales unexpectedly declined.
“We are getting reaction to China’s data; in conjunction with U.S. data of late, it is pointing to a stalled world economy,” said Ioan Smith, a strategist at Knight Capital Europe Ltd. in London. “All the money printing in the world may inflate asset prices, but there will be far fewer buyers for anything that could be considered real.”
The DAX has still gained 16 percent in the past year as central banks from the U.S. to Europe sought to stimulate growth by cutting interest rates and buying bonds. Policy makers from the Federal Reserve and the Bank of England said April 13 they see few signs of equity price bubbles in the U.S. and the U.K., countering criticism that record stimulus is stoking excessive risk-taking. The index has risen 1.3 percent this year.
Gross domestic product in China rose 7.7 percent from a year earlier, the National Bureau of Statistics said in Beijing today. That compares with the 8 percent median forecast in a Bloomberg News survey of 41 analysts and 7.9 percent in the fourth quarter. March industrial production increased less than estimated while retail-sales growth matched forecasts.
In the U.S., the Federal Reserve Bank of New York’s general economic index dropped to 3.1 this month from 9.2 in March, as orders cooled and sales stagnated. Readings exceeding zero signal expansion in New York, northern New Jersey and southern Connecticut. The median projection of 47 economists surveyed by Bloomberg was 7.
Continental declined 1.2 percent to 86.76 euros, its lowest price since Feb. 7. Sales last quarter dropped more than the 1 percent-to-3 percent range Europe’s second-largest maker of auto parts had forecast, Spokeswoman Antje Lewe said in a phone interview. The company reiterated its 2013 sales target of 5 percent growth.
Siemens AG fell 1.8 percent to 79.38 euros after Chief Financial Officer Joe Kaeser said underperforming rail technology and offshore wind projects will result in additional charges and dent quarterly earnings.
Earnings at Europe’s biggest engineering company will also be hurt by waning demand from industrial clients in the U.S. and Germany as well as a weaker-than-expected recovery in China, Kaeser was cited as saying by Rheinische Post on April 13. Company spokesman Guenter Gaugler confirmed the comments.
Infineon dropped the most on the DAX, losing 4 percent to 5.70 euros. Shares in Europe’s second-biggest chipmaker slid on Friday after Volkswagen AG reported car slower deliveries and warned on headwinds in Europe, signaling weakening demand for semiconductors. Infineon gets more than 40 percent of its revenue from chips for the automotive sector.
ThyssenKrupp AG, Germany’s biggest steelmaker, fell 1.9 percent to 13.65 euros, as a gauge of European industrial goods and services shares declined on the Stoxx Europe 600 Index.
The volume of shares changing hands in companies on the DAX was 18 percent lower than the average of the last 30 days, data compiled by Bloomberg showed.