German Stocks Rally After Four-Day Drop as Daimler GainsSofia Horta e Costa
German stocks advanced, with the benchmark DAX Index rebounding from a seven-week low, as companies from Daimler AG to Wacker Chemie AG reported fourth-quarter profit that exceeded estimates.
Daimler rose 2.6 percent after the luxury carmaker also predicted profit would increase significantly this year because of demand for its new Mercedes-Benz vehicles. Wacker Chemie, the chemical maker that turns 100 this year, climbed 4.5 percent. Sky Deutschland AG jumped 8.6 percent after posting 2013 earnings that increased more than analysts had predicted.
The DAX gained 1.5 percent to 9,256.58 at the close of trading in Frankfurt, halting a four-day losing streak. The equity benchmark has declined 5 percent from its all-time high on Jan. 17 amid weaker Chinese economic data, reduced Federal Reserve bond purchases and a drop in emerging-market currencies. The broader HDAX Index rose 1.6 percent today.
“The market is taking two steps forward and one step back,” Karl Huber, who helps oversee about 174 billion euros ($237 billion) at Pioneer Investments, said by phone from Munich. “We should see earnings growth come through during the year as long as things go well in terms of the economy and central-bank policy does not disrupt markets. Daimler is a company that we think has a brave strategy. It’s bringing in a lot of new, different cars that consumers like.”
The European Central Bank left its main interest rate at a record low of 0.25 percent after its meeting today. The decision matched all but four estimates in a Bloomberg survey of 66 economists. Investors had weighed whether recent volatility in financial markets warranted a policy response.
A report from Germany’s Economy Ministry showed that factory orders dropped 0.5 percent in December after growing at a revised 2.4 percent in November. The median estimate compiled by Bloomberg had called for a 0.2 percent increase.
The DAX pared its gains between 1:45 p.m. and 1:49 p.m. today. Futures on the benchmark dropped as low as 9,010 at 1:44 p.m. before rebounding to 9,207. Deutsche Boerse AG’s Eurex business, the market for contracts on the stocks gauge, said that trades during the four-minute period will stand. The exchange had placed them under investigation.
Daimler climbed 2.6 percent to 62.48 euros. Earnings before interest and taxes from continuing operations rose 45 percent to 2.53 billion euros in the final three months of 2013, according to a presentation released today. That exceeded the 2.37 billion-euro average estimate compiled by Bloomberg.
Bayerische Motoren Werke AG, which reports its 2013 earnings on March 19, gained 2 percent to 81.44 euros. Continental AG, the tiremaker which counts Daimler as its biggest customer, rose 3 percent to 158.05 euros.
Wacker Chemie added 4.5 percent to 90.36 euros after saying demand for polysilicon, a material used to make solar panels, increased in the fourth quarter of 2013. Earnings before interest, taxes, depreciation and amortization climbed 18 percent to 158 million euros in the period, according to a statement. Analysts surveyed by Bloomberg had predicted Ebitda would drop 5.9 percent to 126.1 million euros.
Sky Deutschland rallied 8.6 percent to 7.61 euros, its biggest advance in 14 months. Ebitda for 2013 increased by 86 million euros to 34.8 million euros as more subscribers paid for its television channels. Analysts had projected earnings of 33.7 million euros.
GEA Group AG slipped 2.5 percent to 33.20 euros. The maker of milking machines and beer-brewing equipment posted Ebit of 525.3 million euros for 2013, missing the average analyst estimate of 536.1 million euros. Sales of 5.77 billion euros for last year also came below analysts’ projections.
The volume of shares changing hands in companies listed on the DAX was 37 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.