German Stocks Decline as Fresenius Medical Care RetreatsNamitha Jagadeesh
German stocks declined, following yesterday’s biggest advance in 15 months, as Fresenius Medical Care AG and Beiersdorf AG fell, offsetting a report that showed faster-than-forecast growth in the country’s service industries.
Fresenius Medical Care slipped 1.5 percent after Berenberg Bank downgraded the company. Beiersdorf dropped the most in almost seven months as Kepler Cheuvreux SA reduced its price estimate on the maker of Nivea skin cream. Deutsche Annington Immobilien SE retreated 2.6 percent as the company sold shares to raise capital.
The DAX Index lost 0.5 percent to 9,542.02 at the close in Frankfurt. The benchmark jumped 2.5 percent yesterday after Russian President Vladimir Putin said he saw no need to invade eastern Ukraine or annexe the Crimean peninsula. German equities plunged 3.4 percent on March 3 after Russia’s parliament granted Putin the authority to use force in the country. The broader HDAX Index fell 0.4 percent today.
“Markets are returning to a normal state after the shake out of the past few days,” Matthias Jasper, head of equities at WGZ Bank AG in Dusseldorf, Germany, said in a phone interview. “The question was whether Ukraine would be a game changer for markets. But I don’t think it will be. I don’t expect further escalation. Fundamentals will be at the forefront again. The services data show improving signs in the German economy.”
In Germany, a purchasing managers’ index of services industries from Markit Economics rose to 55.9 in February, more than the median economist estimate of 55.4. Readings above 50 mean that activity increased.
In the U.S., an ADP Research Institute report showed that companies hired 139,000 workers in February, fewer than the 155,000 that economists had predicted. ADP revised its figure for January down to 127,000. The Labor Department releases its payrolls and unemployment report on Friday.
The Institute for Supply Management’s measure of U.S. service-industry activity declined more than economists had expected. The non-manufacturing index fell to 51.6 last month from 54 in January. Economists had forecast a reading of 53.5.
Fresenius Medical Care dropped 1.5 percent to 48.78 euros after Berenberg Bank cut its recommendation on the world’s biggest provider of dialysis to hold from buy. The brokerage said it expects the company, which treats chronic kidney failure, to earn less in 2014 than previously estimated because of higher operating costs.
Beiersdorf declined 2.9 percent to 71.42 euros. Kepler Cheuvreux lowered its price estimate on the shares as it reduced its projections for earnings growth from the company’s consumer division in 2014 and 2015.
Deutsche Annington retreated 2.6 percent to 19.40 euros after the residential landlord and former investors placed 513 million euros ($705 million) of shares. Deutsche Annington will use the capital to finance the purchase of 41,500 apartments that it announced on Feb. 28.
Adidas AG slid 3 percent to 80.92 euros, its lowest price since October. The world’s second-biggest sporting-goods maker forecast profit of 830 million euros to 930 million euros in 2014, trailing the 1 billion-euro average estimate of analysts surveyed by Bloomberg. Chief Executive Officer Herbert Hainer said on a conference call that sales from the company’s TaylorMade golf clubs business will fall in the first quarter.
Salzgitter AG added 2.4 percent to 30.11 euros after Citigroup Inc. raised its recommendation on the steelmaker to neutral from underweight, meaning that investors should stop selling the shares. The brokerage said that investors owning the stock would benefit from a recovery in the markets for construction and large-diameter pipes.