German Stocks Little Changed Amid U.S.-Budget ConcernJonathan Morgan
German stocks were little changed as U.S. Treasury Secretary Jacob J. Lew warned investors about the impending deadline to raise the federal debt limit, and a report showed durable-goods orders excluding transportation unexpectedly fell last month in the world’s biggest economy.
Commerzbank AG lost 6 percent, for the biggest decline on the benchmark DAX Index. Deutsche Bank AG fell 2.6 percent after Co-Chief Executive Officer Anshu Jain said third-quarter revenue from debt sales and trading dropped. Wacker Chemie AG rose 2.4 percent after UBS AG added the stock to its most preferred list.
The DAX advanced less than 0.1 percent to 8,665.63 at the close of trading in Frankfurt. The gauge has climbed 8.9 percent this quarter, heading for a 14 percent annual gain. It rose last week after the Federal Reserve refrained from reducing its $85 billion of monthly asset purchases. The broader HDAX Index increased 0.1 percent today.
“The risk-on rally has begun to fade as equity markets are in a wait-and-see mode,” Christoph Hock, an equity sales trader at Alpha Wertpapierhandels GmbH in Frankfurt, wrote in an e-mail. “Confusion about the Fed’s lack of decision to taper and the deadlines on approving a resolution to keep the government funded and to raise the debt ceiling are weighing on markets.”
The volume of shares changing hands in DAX-listed companies was 17 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
Lew, who spoke at the Bloomberg Markets 50 Summit in New York yesterday, said investor confidence that a deal can be struck to raise the debt limit is “a bit greater than it should be.” He repeated that President Barack Obama won’t negotiate with congressional Republicans on increasing the $16.7 trillion ceiling on the nation’s borrowing authority.
In the U.S., orders for durable goods, excluding the volatile transportation category, fell 0.1 percent in August after declining a revised 0.5 percent in July, data from the Commerce Department showed today. Analysts had forecast bookings last month to rise 1 percent.
Purchases of new U.S. homes increased 7.9 percent in August to a 421,000 annualized pace, following a 390,000 rate in the prior month that was less than previously estimated, figures from the Commerce Department showed today in Washington. Demand slumped 14.1 percent in July. The median forecast of 77 economists surveyed by Bloomberg News called for 420,000.
A gauge of German consumer confidence will rise to 7.1 in October from a revised 7 in September, Nuremberg-based research company GfK AG said today. That would be the highest since September 2007. Analysts had expected a reading of 7, according to the median estimate in a Bloomberg News survey.
Commerzbank dropped 6 percent to 8.78 euros, extending its two-day decline to 7.9 percent. Shares fell yesterday after Equinet AG downgraded the lender to hold from buy, citing its exposure to the shipping industry and possible need for another capital increase.
Deutsche Bank, Germany’s largest lender, declined 2.6 percent to 34.56 euros. Jain said at a conference in London that revenue from debt sales and trading fell “significantly” in the third quarter from a year earlier and the bank plans to set aside more reserves for litigation.
K+S AG, a potash producer, retreated 2 percent to 19.60 euros. The market for the crop nutrient has come to a standstill since OAO Uralkali, the world’s biggest producer, in July said it would exit a joint marketing venture with Belaruskali and predicted that prices may tumble 25 percent, Baader Bank AG said, citing K+S’s head of investor relations.
Wacker Chemie advanced 2.4 percent to 73.75 euros. UBS added Europe’s largest polysilicon maker to its most preferred list, citing continuing strong demand for the main raw material in solar panels. The bank forecast an increase in polysilicon prices to $20 to $25 per kilogram from $18 currently.
Thyssenkrupp AG gained 3.7 percent to 18.16 euros after Cevian Capital AB announced the purchase of a 5.2 percent stake in Germany’s largest steelmaker.
Deutsche Post AG added 1.9 percent to 24.02 euros after JPMorgan Chase & Co. raised its target price on Europe’s largest postal service to 26.50 euros from 23.70 euros.