German Stocks Are Little Changed Before Fed MinutesCorinne Gretler
German stocks were little changed after two days of gains, as investors awaited minutes from the Federal Open Market Committee’s meeting last month, and after data showed an unexpected drop in Chinese exports and imports.
K+S AG dropped the most in eight weeks as UBS AG advised investors to sell the potash maker’s stock. Gerresheimer AG lost 2.7 percent after reporting second-quarter earnings that missed analyst estimates. Beiersdorf AG and Henkel AG advanced more than 1.5 percent.
The DAX Index slipped 0.1 percent to 8,048.76 at the close of trading in Frankfurt. The measure has fallen 5.7 percent since May 22, when the Federal Reserve signaled that it may pare stimulus measures if the U.S. economy strengthens in line with its forecasts. The broader HDAX Index lost 0.2 percent today.
“In the U.S., the current focus is on the FOMC minutes, especially against the background of positive economic developments and the latest encouraging figures on the U.S. labor market,” Christian Schmidt, a technical analyst for equities, wrote in a report today. “Market participants pay more attention to signs of an imminent stepback of QE3.”
The volume of shares changing hands in DAX-listed companies was 26 percent lower than the average of the past 30 days, according to data compiled by Bloomberg.
The Federal Reserve releases the minutes of its June meeting at 2 p.m. in Washington. Speaking after that meeting, Chairman Ben S. Bernanke said the central bank may reduce the pace of its $85 billion in monthly bond buying later in 2013, and may halt purchases in mid-2014 if the U.S. economy performs as the Fed forecasts.
A report from the General Administration of Customs in Beijing showed that China’s exports fell 3.1 percent in June from a year earlier. The median estimate in a Bloomberg survey had called for a 3.7 percent increase. Imports dropped 0.7 percent last month, compared with the median projection of a 6 percent increase.
K+S decreased 4 percent to 27.19 euros as UBS cut its rating on the stock to sell from neutral, with analysts led by Joe Dewhurst citing concerns about the company’s debt levels as it increases capital expenditure.
Gerresheimer declined 2.7 percent to 43.55 euros. The producer of pharmaceutical and health-care equipment posted second-quarter earnings before interest, taxes, depreciation and amortization of 59.8 million euros ($76.6 million), compared with the average analyst estimate of 60.3 million euros. The company predicted an EBITDA margin of 19 percent to 19.4 percent for the full year, down from an April forecast of 19.4 percent.
Gagfah SA slid 6.5 percent to 8.75 euros. Fortress Investment Group LLC plans to cut its stake in the second-largest owner of German homes to less than 50 percent as part of a transaction through which Gagfah will also sell shares.
Rational AG, the supplier of automated cookers for Queen Elizabeth II’s kitchen in Buckingham Palace, plunged 17 percent to 205.55 euros, its biggest drop since at least March 2000 when it first sold shares, after exchange-rate shifts dragged first-half profit down 6 percent.
Earnings before interest and taxes in the period probably fell to 50.5 million euros from 53.7 million euros a year earlier, the company said in a statement. Drops in the yen and the pound against the euro hurt sales the most, Chief Executive Officer Guenter Blaschke said.
Beiersdorf advanced 2 percent to 69.86 euros. Morgan Stanley upgraded the maker of Nivea skin cream to overweight from equal weight.
“Visibility on growth increases our conviction that Beiersdorf is set to become one of the strongest earnings-growth stories in European staples,” Erik Sjogren, an analyst at Morgan Stanley, wrote in a note to clients today.
Henkel, the maker of Persil detergent, gained 1.6 percent to 73.59 euros.
Deutsche Bank AG advanced 1.9 percent to 33.10 euros, posting the best performance on the DAX. Credit Suisse Group AG raised Germany’s largest lender to outperform from neutral, meaning investors should buy the shares. The brokerage said Deutsche Bank can cope with potentially stricter regulation on leverage.