German Stocks Advance as Confidence Data Beat ForecastsJonathan Morgan
Stocks in Germany advanced for a fourth day, with the benchmark DAX Index rising to its highest level in more than two months, as a measure of investor confidence increased more than economists had forecast.
EON SE rose 2.2 percent after posting first-half profit that exceeded analysts’ projections. Deutsche Wohnen AG, Germany’s second-largest residential landlord by market value, climbed 1.8 percent after reporting a jump in first-half profit. K+S AG, Europe’s biggest potash distributor, slipped 1.5 percent after sales and earnings missed estimates.
The DAX added 0.7 percent to 8,415.76 at the close of trading in Frankfurt, its highest level since May 28. The gauge has rallied 9.4 percent from its low on June 24 as the European Central Bank said that interest rates will remain low for an extended period. The broader HDAX Index rose 0.6 percent today.
“We got a better than expected ZEW this morning, which helps confirm that the euro zone might be out of the woods and out of recession for now,” Ion-Marc Valahu, co-founder and fund manager at Clairinvest in Geneva, wrote in an e-mail. “Equities have reflected that. Now the big question is to wait and see if the move is sustainable. I doubt we can break to new highs in the short-term.”
The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, rose to 42 in August from 36.3 in July. Economists predicted 39.9, according to the median estimate in a Bloomberg News survey.
U.S. retail sales rose in July for a fourth consecutive month. The 0.2 percent increase followed a 0.6 percent gain in June that was larger than previously reported, according to Commerce Department figures issued today in Washington. The median forecast of 81 economists surveyed by Bloomberg called for a 0.3 percent advance.
EON, Germany’s biggest utility, advanced 2.2 percent to 12.50 euros. Underlying net income, the measure EON uses to calculate its dividend, fell to 1.91 billion euros ($2.54 billion) from 3.3 billion euros a year earlier, the Dusseldorf-based company said today. That still beat the 1.79 billion-euro average estimate of seven analysts surveyed by Bloomberg.
RWE AG, the country’s second-largest utility, climbed 4.5 percent to 22.36 euros, its biggest advance in four months.
Deutsche Wohnen added 1.8 percent to 14.10 euros after it said first-half profit jumped 85 percent as acquisitions increased rental income. Funds from operations excluding divestments, a measure of a property company’s ability to generate cash, rose to 60.6 million euros from 32.8 million euros a year earlier.
Leoni AG jumped 3.9 percent to 40.19 euros after reporting revenue of 1.01 billion euros, beating analyst estimates for 979 million euros. The manufacturer of electric cables increased its sales target for 2013 to 3.8 billion euros from about 3.7 billion euros.
K+S declined 1.5 percent to 18.31 euros. Second-quarter earnings before interest, taxes and some hedging transactions dropped 26 percent to 162.6 million euros, missing the average analyst projection of 175.2 million euros. Sales fell 12 percent to 874.5 million euros, compared with a 918.3 million-euro forecast.
Osram Licht AG, which was spun off from Siemens AG, fell 4.2 percent to 30.69 euros, the lighting manufacturer’s biggest drop since its shares started trading last month.
The volume of shares changing hands in DAX-listed companies was 4.8 percent higher than the average of the past 30 days, according to data compiled by Bloomberg.