German Stocks Extend Record on Optimism of U.S. Debt Deal

German stocks extended an all-time high as investors speculated U.S. politicians will reach an agreement to extend the government’s borrowing authority before a deadline tomorrow.

EON SE rose 1.7 percent as a gauge of European utilities climbed to a two-year high, while RWE AG gained for a third day. Commerzbank AG rallied 2.8 percent to its highest price since March. Aixtron SE, a supplier to the semiconductor industry, dropped to a five-month low as Dutch peer ASML Holding NV posted a 30 percent decline in third-quarter profit.

The DAX climbed 0.5 percent to 8,846 at the close of trading in Frankfurt. The gauge reversed an earlier drop of as much as 0.3 percent after Kevin Brady, a senior House Republican, said House Speaker John Boehner will allow a vote on a Senate plan to end the fiscal impasse and that the agreement will probably pass. The broader HDAX Index increased 0.4 percent today for a fifth day of gains.

“We are coming closer to the debt-ceiling deadline and at the end of the day they will have to agree,” said Michael Kapler, an equities portfolio manager at Mittelbrandenburgische Sparkasse in Potsdam, Germany. “We’ve been in this situation before, which is why markets may seem complacent this time round. The key is how markets react if the U.S. finds a solution in the next 48 hours, and what kind of solution it will be.”

U.S. Talks

A bipartisan Senate agreement to end the U.S. government shutdown, which began on Oct. 1, and raise the federal debt limit is almost completed, Senator Richard Durbin said today. The government will exhaust its $16.7 trillion borrowing authority tomorrow unless Congress approves an increase. Without action, the government would run out of cash to pay its bills at some point between Oct. 22 and Oct. 31, according to the Congressional Budget Office.

EON climbed 1.7 percent to 14.24 euros, while RWE rose 0.9 percent to 27.41 euros as a gauge of European utilities listed on the Stoxx Europe 600 Index advanced to its highest level since August 2011.

Commerzbank rose 2.8 percent to 9.75 euros, while Deutsche Bank AG added 1 percent to 36.55 euros, its highest price in four months. A measure of European lenders rose for a sixth day, extending its highest level since May 2011.

Deutsche Post AG added 0.8 percent to 24.35 euros as HSBC Holdings Plc raised its rating on the postal service to neutral from underweight, similar to a sell recommendation. The brokerage said concerns over the company’s cash flow have eased.

Aixtron dropped 4.2 percent to 10.60 euros, the lowest since April 22, after ASML said gross margin narrowed because an expansion into more advanced technology boosted costs. Infineon Technologies AG, Europe’s second-biggest semiconductor maker, slipped 1.3 percent to 7.24 euros.

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