German Stocks Advance for a Third Day on ECB SpeculationTom Stoukas
German stocks rose, extending the biggest rally for the DAX Index in five months, amid speculation that central banks will further ease monetary policy.
Deutsche Post AG gained 4.5 percent as JPMorgan Chase & Co. and Berenberg Bank upgraded the shares. Volkswagen AG climbed 2.6 percent after posting earnings that matched analysts’ estimates. Daimler AG fell after the third-largest luxury carmaker lowered its full-year profit forecast.
The DAX Index climbed 1.3 percent to 7,759.03 at the close of trading in Frankfurt. The gauge surged 2.4 percent yesterday amid speculation that the European Central Bank will lower interest rates. The broader HDAX Index rose 1.2 percent today.
“The economic data might not be bullish, but it pays to ignore the fundamentals and run with the momentum in these markets,” said Daniel Weston, a portfolio manager at Aimed Capital Management LLC in Munich. “The hunger for gains trumps the headwinds as cash continues to bid up equities.”
The volume of shares changing hands in companies listed on the DAX was 27 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
The ECB will cut its refinancing rate by 25 basis points to 0.5 percent at its meeting on May 2, according to UBS AG, Commerzbank AG and Nomura Holdings Inc. Twenty one of 36 economists in a Bloomberg survey predicted that the central bank will lower its benchmark rate from 0.75 percent.
The Ifo institute’s index of the business climate in Germany, based on a survey of 7,000 executives, fell to 104.4 in April from 106.7 in March. The measure dropped more than economists had estimated in a Bloomberg survey.
Deutsche Post rose 4.5 percent to 18.29 euros. The mail-delivery company was upgraded to overweight from neutral at JPMorgan, meaning that investors should hold more of the shares than are represented in benchmark indexes. The brokerage said that Deutsche Post may climb a further 25 percent. Berenberg raised the stock to buy from hold.
The preferred shares of Volkswagen gained 2.6 percent to 150.70 euros after Europe’s largest carmaker posted first-quarter earnings before interest and taxes that matched analysts’ estimates. Ebit fell to 2.34 billion euros ($3 billion) from 3.17 billion euros a year earlier, the automaker said in a statement. That matched the 2.34 billion-euro average estimate of five analysts surveyed by Bloomberg.
Porsche SE gained 3.3 percent to 57.49 euros, while Bayerische Motoren Werke AG advanced 1.6 percent to 67.84 euros.
Daimler lost 0.8 percent to 40.58 euros after cutting its profit forecast for 2013. Ebit will no longer match last year’s 8.1 billion euros, the Stuttgart, Germany-based company said. Daimler also posted first-quarter Ebit that plunged 56 percent.
Wincor Nixdorf AG slid 3.6 percent to 38.60 euros as Europe’s biggest maker of automated teller machines posted a preliminary profit of 17 million euros for its fiscal second-quarter and revenue of 597 million euros. The company said that no “sustainable signs of recovery are apparent for business in many industrialized countries, especially in Europe.”
Kontron AG retreated 6.3 percent to 4.06 euros. The maker of embedded computer boards posted a 7.5 percent drop in first-quarter revenue to 121.7 million euros.