German Stocks Advance; DAX Posts Seventh Straight RecordSofia Horta e Costa
German stocks rose, with the DAX Index posting its seventh consecutive record, as gains in lenders offset data showing the nation’s economy grew less in the first quarter than predicted and U.S. output fell in April.
Commerzbank rallied 12 percent on the first day of the lender’s 2.5 billion-euro ($3.2 billion) capital increase. TUI AG rose 4 percent after saying it plans to restore its dividend. BASF SE slipped 1 percent, following European peers lower. ThyssenKrupp AG declined after saying it could not rule out a capital increase this year.
The DAX Index added 0.3 percent to 8,362.42 at the close in Frankfurt. The benchmark rallied for three successive weeks as companies reported better-than-forecast results and European Central Bank President Mario Draghi said policy makers are ready to cut interest rates if needed. The broader HDAX Index also gained 0.3 percent today.
The volume of shares changing hands on DAX-listed companies was 22 percent greater than the average of the past 30 days, data compiled by Bloomberg show.
The German economy, Europe’s largest, expanded less in the first quarter than economists had predicted. Gross domestic product rose 0.1 percent from the fourth quarter, when it fell a downwardly revised 0.7 percent, the Federal Statistics Office in Wiesbaden said. Economists had forecast a 0.3 percent gain, according to the median of 41 estimates in a Bloomberg survey.
The 17-nation euro-area economy contracted 0.2 percent in the first quarter, after a 0.6 percent decline in the final quarter of 2012, the European Union’s statistics office in Luxembourg said. That’s the sixth straight quarterly contraction. Economists had predicted a 0.1 percent decrease.
In the U.S., industrial production declined in April by the most in eight months. Output at factories, mines and utilities fell a more-than-forecast 0.5 percent after a revised 0.3 percent gain in the prior month that was weaker than previously reported, a report from the Federal Reserve showed today in Washington. The median forecast in a Bloomberg survey called for a 0.2 percent decline.
Commerzbank surged 12 percent to 7.79 euros as it sold 2.5 billion euros of new shares to repay taxpayers and bolster capital. Investors are buying the shares as recent declines don’t reflect Commerzbank’s value and prospects, said Ronny Rehn, an analyst with Keefe, Bruyette & Woods Inc. in London.
Deutsche Bank, the country’s largest lender, rose 1.9 percent to 36.78 euros.
TUI rose 4 percent to 9.41 euros, its highest price in more than two years. Europe’s largest tour operator said it plans to generate 1 billion euros in operating profit by 2015 and resume dividend payments. TUI today reported a net loss of 248.4 million euros for the quarter ended March 31. Still, it lifted its guidance for this year and said it eventually plans to pay out about 50 percent of its net cash flow in dividends.
BASF, the world’s biggest chemical maker, lost 1 percent to 73.58 euros. A gauge of chemical companies posted the third-biggest decline of the 19 industry groups on the Stoxx Europe 600 Index.
RWE dropped 0.7 percent to 27.41 euros, paring earlier losses of as much as 2.6 percent. Societe Generale AG analysts said Germany’s second-largest utility is among stocks that may be removed from the MSCI World Index after the close of U.S. markets today. Shares fell even as RWE reported first-quarter profit that beat analysts’ consensus estimate for the first time in more than a year after it cut costs.
ThyssenKrupp lost 1.7 percent to 14.85 euros, erasing earlier gains of as much as 5.2 percent. Germany’s biggest steelmaker said it can’t rule out the need to raise capital in the next nine months after a 683 million-euro writedown of its Steel Americas unit widened a quarterly loss.