German Stocks Advance After U.S. Retail Sales IncreaseJonathan Morgan
German stocks advanced, after trading lower for most of the day, as better-than-forecast U.S. retail-sales data outweighed investor concern about escalating tension between Russia and the U.S.
K+S AG led gains on the benchmark DAX Index. Deutsche Post AG fell 1.7 percent after Commerzbank AG downgraded the shares. Rheinmetall AG slumped to a two-month low after a report that its sale of 800 battle tanks to Saudi Arabia may be canceled. Symrise AG lost 2.2 percent as it revealed plans for a capital increase after announcing a proposed takeover of Diana Group.
The DAX added 0.3 percent to 9,339.17 at the close of trading in Frankfurt. The gauge slid 3.9 percent last week amid a selloff in stocks considered too expensive by some investors. The broader HDAX Index slipped less than 0.1 percent today.
“Although Ukraine tensions are high, investors are buying back in a depressed market on positive U.S. retail numbers today,” Daniel Weston, a portfolio manager at Aimed Capital GmbH in Munich, wrote in an e-mail. “Whether this is a dead-cat bounce is what the market will be watching for.”
U.S. retail sales increased in March by the most since September 2012 as Americans bought more cars, clothing and garden supplies, Commerce Department figures showed today.
The 1.1 percent advance exceeded the 0.9 percent median projection in a Bloomberg survey and followed a 0.7 percent gain in February that was bigger than previously reported.
Violence continued to escalate in eastern Ukraine as NATO, the European Union and the U.S. urged Russia to ease the crisis and pull back its troops from Ukraine’s borders. A deadline for pro-Russian separatists to leave buildings they occupied passed without any sign of the forces complying. Russia and the U.S. faced off at an emergency meeting of the United Nations Security Council, blaming each other for causing the unrest.
K+S, Europe’s biggest potash supplier, gained 2.7 percent to 23.38 euros.
Deutsche Post lost 1.7 percent to 26 euros after Commerzbank downgraded the company to reduce from hold, citing valuations and short-term hurdles to profit growth. Deutsche Post trades at 15.4 times its projected earnings, compared with a five-year average of 12.7.
Rheinmetall retreated 2.6 percent to 49.31 euros. Bild am Sonntag reported that German Economics Minister Sigmar Gabriel has intervened in a deal for the sale of 800 Leopard 2 battle tanks to Saudi Arabia and the transaction may not be approved.
Symrise dropped 2.2 percent to 35.05 euros. The company is considering a 10 percent capital increase after buying out Diana, a flavors company, Chief Executive Officer Heinz-Juergen Betram said.