German Stocks Are Little Changed as DAX Gains in JulyTom Stoukas
German stocks were little changed, with the DAX index completing a monthly gain, as unemployment and retail sales in the country fell and as investors weighed prospects for continuing stimulus from the Federal Reserve.
ThyssenKrupp AG slid 4.2 percent after UBS AG advised investors to sell the shares. Deutsche Bank AG lost 1.7 percent after Handelsblatt reported it may have to raise legal provisions by 1.4 billion euros ($1.9 billion). HeidelbergCement AG jumped 5.5 percent after earnings exceeded projections. Bayer AG rose 3.6 percent after posting second-quarter profit that beat estimates and reiterating its full-year forecast.
The DAX Index added less than 0.1 percent to 8,275.97 at the close of trading in Frankfurt. The benchmark climbed 4 percent this month and 7.6 percent from a low on June 24 as central banks around the world pledged to continue stimulus measures. The broader HDAX Index was also little changed today.
“Monetary policy takes center stage once again,” Witold Bahrke, a Copenhagen-based senior strategist at PFA Pension A/S, which oversees about $55 billion, wrote in a message. “It is also an ultra-heavy macro week culminating with the payrolls release on Friday.”
The volume of shares changing hands in DAX-listed companies was 9.8 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.
Investors looked to the Federal Open Market Committee’s two-day policy meeting to gauge when the Fed will pare its bond purchases and the shape any further stimulus would take. The European Central Bank and the Bank of England announce policy decisions tomorrow.
In Germany, data showed unemployment dropped in July for a second month. The number of jobless people fell by a seasonally adjusted 7,000 to 2.93 million, the Nuremberg-based Federal Labor Agency said. Economists in a Bloomberg survey had predicted the number would remain unchanged. The adjusted jobless rate stayed at 6.8 percent, near a two-decade low.
German retail sales, adjusted for inflation and seasonal swings, dropped 1.5 percent in June from May, when they had risen 0.7 percent, the Federal Statistics Office in Wiesbaden said. Economists had predicted an increase of 0.2 percent last month, according to a Bloomberg News survey. Sales fell 2.8 percent from a year earlier.
Companies in the U.S. hired a net 200,000 workers this month, the ADP Research Institute’s data showed today. The median forecast of 40 economists surveyed by Bloomberg had called for a 180,000 gain. The official employment report is due for release on Friday.
ThyssenKrupp dropped 4.2 percent to 16.35 euros. UBS downgraded Germany’s biggest steelmaker to sell from buy, saying investors have factored in a potential sale of the company’s Steel Americas unit.
Deutsche Bank declined 1.7 percent to 33.91 euros. Handelsblatt said current provisions and contingency liabilities only cover 75 percent of the bank’s potential legal risks.
K+S AG, Europe’s largest potash maker, tumbled 8.5 percent to 18.53 euros after plunging 24 percent yesterday. OAO Uralkali, the world’s largest potash producer, said it expects Belaruskali, its former partner, to increase output and ship more potash to Europe. This will hurt K+S, Uralkali’s CEO Vladislav Baumgertners said.
Uralkali abandoned its trading joint venture with Belaruskali yesterday to boost output and sales after the Belarus company started selling the crop nutrient independently.
HeidelbergCement jumped 5.5 percent to 57.74 euros, its biggest increase since Aug. 3, 2012. The third-largest cement maker posted second-quarter profit that beat analysts’ estimates as sales in North America and the recovering U.K. market offset declines elsewhere in Europe.
Bayer advanced 3.6 percent to 87.35 euros, its highest price since at least 1992 according to data compiled by Bloomberg. The maker of drugs and chemicals said earnings before interest, taxes, depreciation, amortization and special items rose 1.2 percent to 2.20 billion euros ($2.90 billion) in the second quarter. That beat the 2.16 billion-euro estimate of 14 analysts surveyed by Bloomberg.
“We are currently maintaining our forecast for 2013, even if this appears increasingly ambitious,” Chief Executive Officer Marijn Dekkers said.
Osram Licht AG climbed 6.4 percent 29.09 euros after the lighting manufacturer spun off from Siemens AG three weeks ago raised profit forecasts because cost-savings targets are being met early.