German Stocks Advance for Third Day; RWE, EON Rise on DAXJonathan Morgan
German stocks advanced for a third day, with the benchmark DAX Index rising to a record, as utility stocks and automakers climbed.
RWE AG jumped 5.9 percent after Exane BNP Paribas upgraded the country’s second-biggest utility. Daimler AG and Bayerische Motoren Werke AG each rose more about 2 percent as a gauge of European carmakers advanced.
The DAX gained 0.6 percent to 9,225.43 at the close of trading in Frankfurt. The benchmark measure has surged 21 percent in 2013 as central banks around the world pledged to leave interest rates low for a prolonged period. The broader HDAX Index also added 0.7 percent today.
“Some asset managers that were waiting on the sidelines for a correction in the market have seen that it hasn’t come, so they have had to go back into the market,” Robert Halver, head of capital-markets research at Baader Bank AG in Frankfurt, said in a telephone interview. “It has been difficult to break this 9,200 level over the past few weeks. The final target for the DAX at the end of the year will be 9,500.”
RWE jumped 5.9 percent to 27.78 euros after Exane upgraded the shares to outperform from neutral, increasing its projected target price on the stocks to 32 euros from 26 euros.
“We are now feeling more reassured about earnings, debt and dividend,” Exane analysts said. “We think power prices in Germany have troughed and the group should benefit from a favorable outcome to German nuclear litigation.”
EON SE, Germany’s biggest utility, advanced 4.1 percent to 14.05 euros. A gauge of utilities was among the best performers of the 19 industry groups on the Stoxx Europe 600 Index.
Daimler, the world’s third-largest maker of luxury vehicles, climbed 1.9 percent to 59.76 euros. BMW, the biggest manufacturer of luxury cars, gained 2 percent to 83.20 euros. Volkswagen AG, Europe’s largest carmaker, advanced 0.3 percent to 195.15 euros, its highest price since at least 1992. A measure of auto-related stocks rose the most on the Stoxx 600.
Sky Deutschland AG added 0.7 percent to 7.59 euros, paring earlier gains of as much as 1.4 percent. UBS AG increased its price estimate for the German pay-television provider controlled by Rupert Murdoch’s News Corp to 8.50 euros a share from 7.30 euros, citing its progress in restructuring and upgrading its customer base.