German Stocks Rise as DAX Posts Weekly Gain on GDP Data

German stocks rose, with the benchmark DAX Index posting its biggest weekly advance in almost two months, after data showed Europe’s largest economy expanded at a faster pace than economists had estimated.

ThyssenKrupp AG climbed 3.8 percent after the nation’s biggest steelmaker reported that quarterly earnings beat analysts’ projections. Fraport AG advanced to the highest price in more than three months after Deutsche Bank AG recommended investors buy the shares. Commerzbank AG slid 2.6 percent after Berenberg Bank said the second-biggest German lender’s revenue targets are unrealistic.

The DAX added 0.7 percent to 9,662.4 at the close in Frankfurt. The benchmark gauge has rallied 3.9 percent this week after Federal Reserve Chair Janet Yellen pledged to continue her predecessor’s policies to support the U.S. economy and a report showed that Chinese imports surged. The index was 0.8 percent below its all-time high on Jan. 17 today. The broader HDAX Index also climbed 0.7 percent.

“Germany’s economic prospects for 2014 are bright, with the country likely to be the engine of the growth for the euro-zone recovery,” Ishaq Siddiqi, market strategist at ETX Capital in London, wrote in a note. “The pace of growth accelerated toward the end of the year as business and consumer confidence indicators ticked up, and domestic demand was robust.”

Germany’s gross domestic product rose 0.4 percent in the three months through December from the third quarter, when it increased 0.3 percent, the Federal Statistics Office in Wiesbaden said. That beat the 0.3 percent gain projected in a Bloomberg survey of economists.

ThyssenKrupp Earnings

ThyssenKrupp rallied 3.8 percent to 20.46 euros. Adjusted earnings from continuing operations before interest and taxes more than doubled to 247 million euros ($338 million) in the quarter through December, the steelmaker said in a statement. That beat the 218.7 million-euro average of estimates compiled by Bloomberg.

Fraport gained 1.7 percent to 56.80 euros, the highest price since Nov. 4. Deutsche Bank raised its rating on the operator of Frankfurt airport to buy from hold, saying that passenger growth may accelerate this year.

RWE AG, Germany’s second-largest power producer, advanced 1.7 percent to 28.88 euros. A gauge of utility companies posted the biggest increase among 19 industry groups in the Stoxx Europe 600 Index.

Environmental Levy

BASF SE gained 1.5 percent to 82.51 euros after a senior coalition lawmaker said the world’s largest chemical maker may be among companies that will be allowed to pay a lower environmental levy. The government is set to reduce the number of companies being exempted from the EEG-Umlage levy, which helps finance the country’s clean-energy expansion, according to Hubertus Heil, energy policy spokesman for the Social Democrats.

Commerzbank lost 2.6 percent to 13.25 euros. Berenberg Bank reiterated its sell rating on the stock. The brokerage said the lender’s annual-revenue growth goal of 4 percent to 5 percent is unrealistic amid a weak economic expansion.

MorphoSys AG declined 4.3 percent to 63.50 euros after Commerzbank downgraded the biotechnology company to hold from buy, meaning that it no longer recommends buying the shares. The bank said the stock has reached its price estimate and cited a lack of catalysts to drive shares higher in the near term.

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