German Stocks Advance After U.S. Sentiment Data BeatJonathan Morgan
German stocks advanced for a ninth day, with the benchmark DAX Index extending its record, after better-than-expected reports on U.S. leading indicators and consumer sentiment.
Volkswagen AG, Europe’s biggest automaker, climbed 3.7 percent as data showed European car sales increased for the first time in 19 months in April. Suedzucker AG dropped to an eight-month low as J&E Davy Holdings Ltd. downgraded the shares.
The DAX added 0.3 percent to 8,398 at the close of trading in Frankfurt, for its longest winning streak since July 2009. The benchmark rose 1.4 percent this week and has rallied 10 percent this year as central banks around the world maintained monetary stimulus. The HDAX Index advanced 0.3 percent today.
“Equity investors are rightfully enjoying themselves as auto sales kicked off a day of positive economic data in Europe and followed through with confidence and leading indicators in the U.S.,” Daniel Weston, a portfolio manager at Aimed Capital Management LLC in Munich, wrote in an e-mail. “Momentum and money are chasing each other and it feels set to continue into the weekend.”
The volume of shares changing hands on DAX-listed companies was 25 percent greater than the average of the past 30 days, data compiled by Bloomberg show.
The index of U.S. leading indicators climbed more than expected in April. The Conference Board’s gauge of the outlook for the next three to six months rose 0.6 percent after falling a revised 0.2 percent in March that was steeper than previously reported, the New York-based group said today. The median forecast of economists surveyed by Bloomberg called for a 0.2 percent increase.
The Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to 83.7 in May from 76.4 the prior month, a separate report today showed. The median forecast in a Bloomberg survey was for a gain to 77.9. Forecasts ranged from 74 to 82.5.
Fed Bank of San Francisco President John Williams said quickening economic growth and an improving job market may prompt the central bank to begin to reduce its $85 billion of monthly bond purchases in the next few months.
Williams was one of the first Fed officials to advocate the purchase of bonds without setting a time or total limit. He doesn’t vote on policy this year.
The European Banking Authority delayed stress tests for lenders that it had planned to undertake this year, allowing the European Central Bank to hold its own review of the institutions’ asset quality. The London-based EBA, which was set up in 2011 to harmonize rules across the European Union, postponed its tests until 2014.
Volkswagen, Europe’s biggest automaker, gained 3.7 percent to 168.40 euros. Daimler AG, the third-biggest luxury-vehicle maker, rose 3.9 percent to 49 euros, its highest price since August 2011. Continental AG, Europe’s second-largest auto-parts maker, added 3 percent to 100.30 euros. A measure of carmakers posted the best performance of the 19 industry groups on the Stoxx Europe 600 Index.
European car sales advanced in April on gains in the U.K. and a rebound in Germany. Registrations increased 1.8 percent to 1.08 million vehicles from 1.06 million cars a year earlier, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said.
Lanxess AG, which makes specialty chemicals, plastics, and rubber used in car tires, jumped 6.6 percent to 57.21 euros. Michelin & Cie, Europe’s largest tiremaker, today reiterated its 2013 profit forecast as growing demand for high-margin tires for mining vehicles helps offset declining demand in Europe.
Suedzucker, which makes sugar, starch and bakery additives, dropped 5.9 percent to 25.72 euros. Davy downgraded the shares to neutral from outperform, citing the company’s lower-than-expected earnings guidance for the fiscal year.
Deutsche Telekom AG slipped 1.4 percent to 9.21 euros. Europe’s second-largest telephone company traded without the right to a dividend today.
UBS AG cut its recommendation on global telecom stocks to underweight, which is similar to a sell rating. A gauge of phone stocks fell the most on the Stoxx 600.