German Stocks Drop as Tension Mounts in Eastern Ukraine

German stocks fell, posting their biggest two-day drop in more than three weeks, as the U.S. accused Russia of provoking further unrest in Ukraine, renewing concern that the crisis could disrupt global trade.

Infineon Technologies AG slid 1.8 percent after Bank of America Corp. recommended selling shares in Europe’s second-biggest semiconductor maker. Suedzucker AG tumbled the most since at least 1998 after forecasting revenue and operating profit for this financial year that fell short of estimates.

The DAX slipped 0.2 percent to 9,490.79 at the close in Frankfurt, extending its two-day decline to 2.1 percent. The gauge earlier slid as much as 1.3 percent before trimming its losses in the final two hours of trading. The broader HDAX Index retreated 0.5 today. A three-day slide in the Nasdaq 100 gauge of U.S. technology stocks has helped push German equities lower, prompting traders to sell the best-performing stocks on concern valuations have risen too far.

“We have a couple of fear factors in the market, particularly the crisis in Ukraine,” said Christian Schmidt, a Frankfurt-based analyst for equities at Helaba Landesbank Hessen-Thueringen. “There’s uncertainty all over the market. The Nasdaq 100 Index fell the most in three days since 2011. That increases fears about a bigger correction.”

The U.S. accused Russia of instigating the storming of government offices in eastern Ukraine amid increasing concern that Russian President Vladimir Putin plans to make Ukraine a loose federation allied with Moscow.

Ukraine Crisis

White House press secretary Jay Carney said yesterday that some of the pro-Russian separatists who seized administration buildings in the cities of Luhansk and Donetsk were paid provocateurs brought in from outside.

Infineon slid 1.8 percent to 8.43 euros. Bank of America lowered its recommendation on the shares to underperform from neutral, citing the company’s valuation. Infineon trades at 13.7 times the estimated earnings for its financial year ending in 2016, according to data compiled by Bloomberg.

Suedzucker tumbled 21 percent to 16.23 euros. The sugar producer forecast revenue of about 7 billion euros ($9.7 billion) for its financial year ending in February 2015, less than the average analyst projection of 7.5 billion euros.

The company also predicted operating profit of 200 million euros, missing the 608 million-euro average of analyst estimates. Suedzucker said that the markets for sugar and bioethanol in Europe have deteriorated, causing earnings in the current quarter to decline from a year earlier.

ThyssenKrupp AG, Germany’s largest steelmaker, climbed 1.2 percent to 19.96 euros for the biggest gain on the DAX.

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