German Stocks Drop the Most in Two Months; BMW SlidesJonathan Morgan
German stocks declined the most in more than two months as a report showed that Germany’s auto market plummeted last month, while Bayer AG and BASF SE fell.
Bayerische Motoren Werke AG and Volkswagen AG lost more than 2.5 percent as a gauge of automakers posted the biggest drop on the Stoxx Europe 600 Index. Bayer, Germany’s largest drugmaker, retreated 4.3 percent after a U.S. court ruled that its patent to produce the birth-control pill Yaz was invalid. BASF slid 3.8 percent as a gauge of chemical companies slipped.
The DAX Index slumped 2.3 percent to 7,503.03 at the close of trading in Frankfurt, its biggest plunge since Feb. 4. The equity benchmark completed its longest losing streak in eight months, erasing its gain for the year. The broader HDAX Index retreated 2.1 percent today.
“European equities are trading to the down side again as economic numbers in Germany show a further slowdown in activity,” Ion Marc Valahu, co-founder and fund manager at Clairinvest in Geneva, said, referring to car sales. “If Germany the power engine of Europe is slowing, you can imagine what is happening to other European Union economies.”
The volume of shares changing hands in companies on the DAX was 13 percent greater than the average of the last 30 days, data compiled by Bloomberg showed.
The DAX plunged following a surge in the volume of futures trading on the gauge. Some 14,000 contracts expiring in June changed hands in a a five minute period at about 9:50 a.m. in Frankfurt today, more than 15 times the 20-day average volume for that time of day, according to data compiled by Bloomberg.
Deutsche Boerse AG, the operator of Frankfurt’s stock exchange, published a statement at 5:14 p.m. saying that external events rather than a “computer error” or fat-finger trade caused prices to tumble this morning.
In the U.S., the Federal Reserve releases its Beige Book report at 2 p.m. in Washington. The survey analyzes economic conditions in 12 U.S. districts. Fed Chairman Ben S. Bernanke said on April 8 that “the economy is significantly stronger than it was four years ago, although conditions are clearly still far from where we would all like them to be.”
BMW, the largest manufacturer of luxury cars, dropped 2.8 percent to 65 euros, while Volkswagen, the world’s second-biggest carmaker, fell 2.9 percent to 141.45 euros.
European car sales slid to a 20-year low last month. Registrations in March fell 10 percent to 1.35 million vehicles, their 18th consecutive monthly decline, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said in a statement. First-quarter deliveries in the region dropped 9.7 percent to 3.1 million cars.
Bayer fell 4.3 percent to 77.58 euros. The U.S. Court of Appeals for the Federal Circuit in Washington overturned a trial judge’s upholding of the patent. The court ruled the patent was an obvious variation of an earlier patent that expires in June 2014. Actavis Inc., Lupin Ltd. and Novartis AG’s Sandoz unit will be able to sell copies of the contraceptive.
BASF, the world’s biggest chemical maker, slid 3.8 percent to 65.55 euros.
Deutsche Bank AG, Germany’s biggest bank, lost 3.4 percent to 30.23 euros after Societe Generale SA downgraded the shares to hold from buy.