Stocks in Germany Decline to Three-Month Low on UkraineSofia Horta e Costa and Namitha Jagadeesh
German stocks fell to their lowest level in three months as investors speculated that Russia is lining up armed forces along the eastern border of Ukraine.
K+S AG lost the most since July after predicting a drop in 2014 earnings because of lower potash prices. Deutsche Bank AG slid 2.9 percent after saying investment-banking revenue was under pressure in the first quarter. Deutsche Lufthansa AG advanced 3.9 percent as it reinstated dividend payments.
The DAX fell 1.9 percent to 9,017.79 at the close of trading in Frankfurt. The measure has lost 7.4 percent since a record on Jan. 17 amid signs China’s economy is slowing and concern that Russian military intervention in Ukraine could lead to sanctions and trade disruptions. The broader HDAX Index lost 1.7 percent today.
“Rumors that the Kremlin is massing armed forces near the Ukraine border have been enough for markets to take a dive,” said Matthias Jasper, head of equities at WGZ Bank AG in Dusseldorf, Germany. “People are getting more nervous. Selling pressure might continue for a couple more days.”
Germany is the nation with the most at stake in Ukraine among western European countries, according to data compiled by Bloomberg. Trade between the two countries totaled $8.38 billion in 2012. Germany is Russia’s biggest trading partner after China, the data also show.
The New York Times reported that Russia’s Defense Ministry today announced new military operations in the Belgorod, Kursk and Rostov regions near eastern Ukraine. The newspaper cited statements by the ministry.
Voters in the Crimean region will take part in a referendum on Sunday to decide whether to leave Ukraine and join Russia.
German Chancellor Angela Merkel said today that Russia is risking significant political and economic damage. U.S. President Barack Obama appealed to Russian leader Vladimir Putin yesterday to not absorb the Black Sea peninsula after the vote or the U.S. and its allies “will be forced to apply a cost” to Russia’s violations of international law.
K+S tumbled 9.9 percent to 22.10 euros, extending its two-day decline to 12 percent. Europe’s largest potash supplier said 2014 earnings and revenue will fall as it maintains similar sales volumes for potash and magnesium products at lower prices.
K+S yesterday reported an 18 percent slide in 2013 earnings before interest, taxes and some hedging transactions, or Ebit I, and proposed an 82 percent dividend cut to help pay for the development of a mine in Canada.
Deutsche Bank slipped 2.9 percent to 31.55 euros, its lowest price since July. Germany’s biggest lender said political uncertainty in Ukraine, weak economic data from China and Germany are hurting revenue at its investment banking unit. Deutsche Bank’s revenue from the unit fell 27 percent to 2.46 billion euros ($3.42 billion) in the fourth quarter.
Lufthansa climbed 3.9 percent to 18.61 euros. The company proposed a dividend of 45 euro cents a share, after last year scrapping its payout to shareholders, and reiterated its forecast of tripling operating profit within two years. Europe’s second-largest airline also reported 2013 operating profit that exceeded the average analyst projection.
The number of shares changing hands in DAX-listed companies was 31 percent greater than the average of the last 30 days at this time of day, according to data compiled by Bloomberg.