German Stocks Little Changed as U.S. Data Beats ForecastJonathan Morgan
German stocks were little changed, after swinging between gains and losses, as investors weighed better-than-estimated U.S. retail-sales data to gauge the outlook for the Federal Reserve’s stimulus policy.
Deutsche Post AG dropped 1.2 percent after Bank of America Corp. lowered its rating for Europe’s largest postal company. Wirecard AG retreated 5.2 percent after Barclays Plc downgraded the stock. ThyssenKrupp AG fell 1.6 percent as investors speculated the steelmaker will announce a capital increase soon.
The DAX Index added 0.1 percent to 9,202.07 at the close of trading in Frankfurt, after rising as much as 0.5 percent and falling as much as 0.3 percent. 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 was little changed today.
“All other things being equal, better-than-expected retail sales point to less need for stimulus,” Raimund Saxinger, a fund manager at Frankfurt-Trust Investment GmbH, which oversees about $22 billion, said in a telephone interview. “The market needs new triggers which are unlikely to come from the Fed.”
Retail sales in the U.S. rose more than forecast in October, data showed today. The 0.4 percent increase was the most in three months and followed no change in September, according to the Commerce Department in Washington. The median forecast of 86 economists surveyed by Bloomberg called for a 0.1 percent October advance.
A separate release at 10 a.m. Washington time will probably show sales of previously owned homes slowed to a 5.14 million annual pace in October, from a 5.29 million rate a month earlier.
The Fed will release minutes of its October policy meeting today. The document will reveal more details on the central bank’s decision to maintain its pace of asset purchases at $85 billion a month. Fed policy makers will probably trim the bond-buying to $70 billion at their March 18-19 meeting, according to the median estimate in a Bloomberg survey.
Deutsche Post dropped 1.2 percent to 24.81 euros after Bank of America downgraded the shares to neutral from buy, citing valuation.
Wirecard declined 5.2 percent to 26.61 euros after Barclays lowered the shares to equal weight, a rating similar to hold, from overweight, which is equivalent to buy. The brokerage said the company’s growth prospects have been factored into the stock price and it is difficult to justify any further gains. Wirecard has jumped 43 percent this year, following a four-year rally.
ThyssenKrupp fell 1.6 percent to 19.09 euros. Baader Bank said Germany’s largest steelmaker will go in for a 10 percent capital increase.
Metro AG advanced 2.4 percent to 36.63 euros. Barclays upgraded Germany’s biggest retailer to overweight from equal weight, citing the possible sale of a Russian operation, improving sales in key divisions and a potential to cut borrowing costs. Metro rallied 7.9 percent yesterday after saying it is considering a partial initial public offering of its Russian Cash & Carry unit.