German Stocks Advance as Infineon Rises on Profit MarginSofia Horta e Costa
German stocks climbed, paring the benchmark DAX Index’s worst month since August, as Infineon Technologies AG said profitability beat its forecast.
Infineon advanced the most in more than six months. Puma SE dropped the most since July 2010 after UBS AG recommended that investors sell the sports-shoe maker’s shares. Commerzbank AG slipped 1.5 percent as MainFirst downgraded the lender.
The DAX Index added 0.4 percent to 9,373.48 at the close of trading in Frankfurt. The equity benchmark has still retreated 1.9 percent so far in January as the Argentinian government’s decision to allow the peso to devalue triggered a rout in emerging-market currencies. The broader HDAX Index advanced 0.3 percent today.
“Nothing supporting European equities has fundamentally changed,” said Michael Kapler, an equities portfolio manager at Mittelbrandenburgische Sparkasse said by phone from Potsdam, Germany. “Economic data is getting better in developed countries, and we had Bernanke yesterday saying that the U.S. recovery is continuing.”
The DAX earlier fell as much as 0.8 percent following a sell-off in emerging-market currencies. German stocks climbed as a gauge of 20 currencies compiled by Bloomberg, including the Brazilian real, the Russian ruble and the Turkish lira, erased a loss of as much as 0.5 percent.
The Federal Reserve yesterday reduced its monthly bond buying by $10 billion to $65 billion, citing an improving labor market and faster economic growth. That matched the median economist estimate in a Bloomberg survey conducted before the meeting. Janet Yellen will preside over the Federal Open Market Committee’s next meeting on March 18-19. She succeeds Ben S. Bernanke as chairman on Feb. 1.
A Commerce Department report today showed the world’s largest economy expanded 3.2 percent at an annualized rate in the final three months of 2013. That matched the average economist estimate in a Bloomberg survey. Gross domestic product expanded 4.1 percent in the previous quarter.
Infineon Technologies rose 4.2 percent to 7.70 euros. Operating profit before some items, which the company calls the segment result, fell to 11.8 percent of sales in the three months ending Dec. 31, from 14.1 percent in the preceeding period. The semiconductor maker said on Nov. 12 that the margin would drop to between 8 percent and 10 percent.
Puma fell 5.1 percent to 212.45 euros as UBS lowered its rating on the stock to sell from neutral. Analysts Fred Speirs and Eva Quiroga said that Kering, a French retailer, may not buy out the remaining shares of Puma. It owns 83 percent of the company, according to data compiled by Bloomberg. The brokerage also said that increased spending on marketing its products will reduce profit this year.
Commerzbank lost 1.5 percent to 12.93 euros as MainFirst cut its rating on the bank to underperform from outperform, meaning that investors should sell the shares. The brokerage cited the stock’s 127 percent rally from its 20-year low on July 8 through yesterday. It said that Commerzbank’s shipping and commercial real estate assets will appreciate at a slower pace.
K+S AG, Europe’s largest potash supplier, dropped 2.7 percent to 21.98 euros after Canada’s Potash Corp. of Saskatchewan Inc. forecast 2014 profit that missed analysts’ estimates. K+S will report its financial results for 2013 on March 13.
The number of shares changing hands in companies listed on the DAX was 17 percent greater than the average of the past 30 days, data compiled by Bloomberg showed.