German Stocks Rise as Investors Ponder Coalition, Data

German stocks rose the most in two months as factory output in the euro area surged to a 31-month high and a new coalition named ministers for Chancellor Angela Merkel’s third term.

Deutsche Telekom AG advanced the most in more than four months after a report that Sprint Corp. is considering a bid for its unit T-Mobile US Inc. Commerzbank AG climbed 4.1 percent. Aurubis AG fell to a four-month low as Europe’s biggest refined-copper producer posted a full-year loss.

The benchmark DAX Index added 1.7 percent to 9,163.56 at the close, for its biggest increase since Oct. 10. The gauge declined 1.8 percent last week as better-than-forecast U.S. data spurred some investors to predict the Federal Reserve will announce a decision to taper stimulus after its two-day policy meeting which begins tomorrow. The broader HDAX Index also rose 1.7 percent today.

“The main topic is the upcoming Federal Reserve meeting, in which we may get at least a verbal preparation for tapering,” said Alessandro Fezzi, a senior market analyst at LGT Bank Schweiz AG in Zurich. “Manufacturing data in Europe was positive, and Germany continues to be the region’s locomotive. Investors are cautiously optimistic. We believe markets have priced in the possibility of an earlier tapering.”

The volume of shares changing hands in DAX-listed companies was 18 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.

Manufacturing Expands

Euro-area factory output in December grew at a faster pace than economists forecast, led by Germany, data showed. An index based on a survey of purchasing managers increased to 52.7, London-based Markit Economics said. That was above the estimate of 51.9 in a Bloomberg News survey. The gauge has been above 50, the threshold of expansion, for six months. German manufacturing PMI reached a 30-month high in December.

Merkel this week begins her third term as chancellor after the Christian Democratic Union, its CSU Bavarian sister party and the Social Democrats reached a coalition agreement. The party leaders will sign the accord today and Merkel will be sworn in tomorrow. Based on the deal, Merkel presented a cabinet that keeps Wolfgang Schaeuble as finance minister.

Deutsche Telekom climbed 3.8 percent to 11.79 euros. Sprint is studying antitrust concerns and may make a T-Mobile bid in the first half of next year, the Wall Street Journal reported, citing unnamed people. Deutsche Telekom owns about 67 percent of T-Mobile, the fourth-largest U.S. wireless carrier, according to data compiled by Bloomberg.

Commerzbank, Siemens

Commerzbank gained 4.1 percent to 11.10 euros, its highest price since February. Germany’s second-biggest lender sold 14 chemical tankers to a fund managed by Oaktree Capital Management LP, removing 280 million euros ($385 million) in bad shipping loans from its books.

Siemens AG climbed 2.9 percent to 96 euros. MidAmerican Energy Holdings Co., the power unit of Warren Buffett’s Berkshire Hathaway Inc., agreed to buy wind turbines valued at more than $1 billion from Siemens AG for five projects in Iowa.

HeidelbergCement AG increased 1.1 percent to 54.97 euros as a gauge of European construction companies posted the best performance among the 19 industry groups in the Stoxx Europe 600 Index.

Aurubis declined 1.9 percent to 41.09 euros after posting a full-year net loss of 153 million euros, compared with a profit of 363 million euros a year earlier. The company also said it plans a dividend of 1.10 euros per share, missing the Bloomberg Dividend Forecast of 1.20 euros.