German Stocks Advance as Consumer Sentiment Increases

German stocks climbed, posting their biggest two-day advance since April, as a report showed the nation’s consumer sentiment will increase in July more than economists had forecast.

SAP AG added 4.6 percent after its co-Chief Executive Officer said the world’s largest maker of business-management software has gained market share. GSW Immobilien AG jumped 3.8 percent after Berlin’s largest residential landlord said both its chairman and chief executive officer will leave.

The DAX Index rose 1.7 percent to 7,940.99 at the close of trading in Frankfurt, extending their 1.6 percent rally yesterday. The gauge retreated 4.2 percent last week as investors prepared for a potential paring of stimulus this year by the Federal Reserve if the U.S. economy improves. The broader HDAX Index also increased 1.6 percent today.

“The good consumer confidence data in Germany is supportive that recent weaker macro-economic data hasn’t dented consumerism,” James Butterfill, who helps oversee 29 billion pounds ($44 billion) as head of global equity strategy at Coutts & Co. in London, said. “There is a post selloff relief rally across all equity markets. When tapering is about to occur, there is an initial shock, but when there is confirmation of the baton of growth -- shifting to a more sustainable economy -- it tends to be supportive of equity markets.”

The volume of shares changing hands in companies listed on the DAX was 27 percent greater than average of the past 30 days, according to data compiled by Bloomberg.

A German consumer confidence gauge for July rose to 6.8 from 6.5 in June, Nuremberg-based research company GfK AG said today. That would be the highest since September 2007. Analysts had expected a reading of 6.5, according to the median of 32 estimates in a Bloomberg News survey.

Failing Banks

European Union finance ministers meet in Brussels today to resume their discussions over how to handle failing banks. Irish Finance Minister Michael Noonan will chair his final meeting under Ireland’s six-month presidency of the EU.

SAP advanced 4.6 percent to 57.39 euros. Co-CEO Bill McDermott told CNBC after the close of European trading yesterday that the company’s cloud business in Europe is growing rapidly. SAP slid 9.6 percent from the beginning of the year through yesterday, while the Stoxx 600 Technology Index climbed 3.2 percent.

GSW Immobilien rallied 3.8 percent to 29.61 euros. CEO Bernd Kottmann will leave his post on July 15 and Chairman Eckart John von Freyend will follow him on July 31, GSW said in a statement late yesterday. Shareholders passed a no-confidence motion against Kottmann at a meeting last week. They also voted to dismiss Freyend.

Merck, Commerzbank

Merck KGaA, the German maker of cancer drug Erbitux, advanced 1.7 percent to 116.90 euros. Merck plans to expand its liquid-crystals business beyond displays for flat-screen televisions, according to Chief Financial Officer Matthias Zachert, who was speaking to reporters in Darmstadt.

Commerzbank AG dropped 2.1 percent to 6.90 euros, its lowest price since at least 1992. BNP Paribas SA reached the final stages of its negotiations to buy Commerzbank’s custodian business, according to a report in Boersen-Zeitung, which did not state where it obtained the information. The agreement between Germany’s second-biggest bank and France’s largest lender is expected to be signed by mid-July, according to the Boersen-Zeitung report.