German Stocks Advance as Henkel, Deutsche Telekom BeatJonathan Morgan
German stocks advanced to a record high as Deutsche Telekom AG and Henkel AG reported better-than-forecast first-quarter results.
Deutsche Telekom climbed to its highest price in seven months after posting quarterly profit that fell less than estimated. Henkel, the maker of Dial soap and Loctite glue, rose the most since November 2010 after saying first-quarter profit increased 8.9 percent.
The benchmark DAX Index added 0.8 percent to 8,249.71 at the close of trading in Frankfurt. The measure rallied yesterday as companies posted earnings that beat forecasts and factory orders in Europe’s largest economy unexpectedly rose. The gauge has risen 8.4 percent this year as central banks maintained stimulus measures. The HDAX Index also added 0.8 percent today.
“Companies that have had good numbers are going up and out-performing,” Andy Lynch, who helps manage about $1.6 billion as portfolio manager at Schroder Investment Management Ltd., said in a telephone interview. “The market is being driven by fundamentals. Good results are being rewarded.”
German industrial output unexpectedly rose for a second month in March in a further sign that Europe’s largest economy is returning to growth.
Production increased 1.2 percent from February, when it gained 0.6 percent, the Economy Ministry in Berlin said today. Economists forecast a 0.1 percent decline, according to the median of 40 estimates in a Bloomberg News survey.
Deutsche Telekom AG advanced 4.7 percent to 9.56 euros. Germany’s largest phone company reported first-quarter profit before some items fell 4.3 percent to 4.29 billion euros ($5.62 billion), compared with the 4.24 billion-euro average forecast of analysts compiled by Bloomberg.
Henkel climbed 5 percent to 75.34 euros after saying first-quarter adjusted earnings before interest and taxes rose to 600 million euros from 551 million euros a year earlier. That beat the 582.1 million-euro average estimate of seven analysts compiled by Bloomberg.
Kuka AG climbed 7.9 percent to 37.05 euros, its highest price since at least January 1996. The manufacturer of production machinery and equipment reported first-quarter revenue of 436 million euros, beating analysts’ estimates for 431 million euros.
Tom Tailor Holding AG rose 5.9 percent to 17.65 euros. The clothing company reiterated its full-year 2013 revenue forecast, even as it reported a first-quarter adjusted net loss of 3.8 million euros.
Xing AG climbed 4.3 percent to 42.30 euros, extending a two-day advance to 7.1 percent after Close Brothers Seydler Research and M.M. Warburg analysts yesterday upgraded their recommendations on the business social network to buy.
Evonik Industries AG, the chemical maker that listed shares in Frankfurt two weeks ago, slipped 1.5 percent to 31.50 euros after it said first-quarter profit fell 10 percent. Adjusted earnings before interest, tax, depreciation and amortization dropped to 589 million euros from 656 million euros. Sales fell 4 percent to 3.26 billion euros in the quarter.
Commerzbank AG, Germany’s second-largest lender, dropped 3.7 percent to 10.69 euros. The shares need to fall further to become attractive, according to a note from Nomura Holdings Inc., which cited “weak” fundamentals and high “earnings uncertainty” for 2015.
Deutsche Bank AG, the biggest German lender, declined 0.8 percent to 36.82 euros. A gauge of bank stocks posted the second-worst performance of the 19 industry groups on the Stoxx Europe 600 Index.
The volume of shares changing hands in companies on the DAX was 0.8 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.