Most German Stocks Fall From Record as Continental DropsJonathan Morgan
Most German stocks declined, with the benchmark DAX Index falling from a record, as the Federal Reserve holds a two-day policy meeting at which it may decide to reduce its monthly bond purchases.
Continental AG fell 3.1 percent as Schaeffler AG and its holding company Schaeffler Verwaltungs GmbH sold a combined 4 percent stake in Europe’s second-largest car-parts maker. Volkswagen AG retreated 1.5 percent as data showed European car sales resumed their decline in August.
The DAX lost 0.2 percent to 8,596.95 at the close of trading in Frankfurt, with two stocks falling for each that rose. The gauge rose 2.8 percent last week amid better-than-expected Chinese economic data and as U.S. President Barack Obama delayed a decision on military action against Syria. The broader HDAX Index also retreated 0.2 percent today.
“German stocks are currently in a vacuum ahead of the long-awaited announcement of quantitative-easing tapering,” Peter Garnry, an equity strategist at Saxo Bank A/S in Copenhagen, wrote in an e-mail. “Most of the initial uncertainty about QE tapering has already been discounted and that is also one of the reasons why it has not stopped the DAX from reaching new highs.”
The Federal Open Market Committee will probably decide in a two-day policy meeting starting today to lower its $85 billion of monthly bond purchases by $10 billion, according to the median response of 34 economists in a Bloomberg News survey earlier this month. That’s down from the forecast of a $20 billion reduction in a July survey.
“What will happen at the FOMC is likely a very dovish angle to the QE tapering conditioned on economic data,” Garnry wrote. “Following the FOMC meeting and a growing global economy, equities will jump back into gear pushing for highs towards the end of the year.”
German investor confidence increased for a second month in September. 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 49.6 from 42 in August. Economists had forecast a reading of 45, according to the median of 37 estimates in a Bloomberg News survey.
German Chancellor Angela Merkel is seeking reelection on Sept. 22. Even as most polls show she will win a third term, investors are waiting to see the composition of the expected coalition government. With the DAX just off a record, the potential for further gains is limited, Raimund Saxinger, a fund manager at Frankfurt-Trust Investment GmbH, wrote on Sept. 13.
Continental slid 3.1 percent to 123 euros. Its largest stockholder placed about 8 million shares with a broad range of international investors.
Volkswagen, Europe’s biggest automaker, and Bayerische Motoren Werke AG, the world’s largest manufacturer of luxury cars, retreated 1.5 percent to 180.25 euros and 0.5 percent to 80.18 euros, respectively. Daimler AG, the third-biggest luxury-vehicle manufacturer, declined 1.2 percent to 556.97 euros.
Car registrations dropped 4.9 percent to 686,957 vehicles from 722,458 cars a year earlier, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said today. Eight-month sales declined 5.2 percent to 8.14 million autos.
A gauge of carmakers posted the biggest decline of the 19 industry groups in the Stoxx Europe 600 Index.
EON SE and RWE AG, Germany’s biggest utility companies, rose 0.8 percent to 13.74 euros and 1 percent to 25.51 euros, respectively, as a measure of utility stocks posted the best performance on the Stoxx 600.