German Stocks Little Changed Near a Record as RWE DropsInyoung Hwang
German stocks were unchanged near a record level as investors weighed earnings from RWE AG and further violence in Ukraine.
Nordex SE rallied to the highest price in almost five years after posting quarterly earnings that beat analysts’ estimates. RWE slid 2.2 percent after reporting that first-quarter profit fell 36 percent.
The DAX Index was unchanged at 9,754.39 at the close in Frankfurt. The equity benchmark rallied 6.3 percent from a low on April 15 to a record 9,754.43 yesterday as mergers-and-acquisitions activity increased and European Central Bank President Mario Draghi said officials are ready to ease monetary policy in June if necessary. The broader HDAX Index slipped less than 0.1 percent today.
“Some of the internals of the market are looking very fragile,” Ian Williams, a market strategist at Peel Hunt LLP in London, said by telephone. “In the absence of more M&A activity, valuations are looking quite full. What we need is better earnings momentum, which is still slower in coming through than investors might have hoped.”
The DAX trades at 13.6 times estimated profit, greater than its five-year average of 11.9, according to data compiled by Bloomberg. The gauge has surged 88 percent from Sept. 9, 2011, when its price-earnings ratio briefly fell to 7.8.
Pro-Russian separatists killed seven soldiers and wounded eight others during an ambush in the region of Donetsk in eastern Ukraine, according to a statement from the acting government in Kiev late yesterday. More than 30 militants attacked a convoy near the city of Kramatorsk, the Defence Ministry said. Ukraine holds presidential elections on May 25.
Nordex rallied 11 percent to 14.28 euros, its highest price since May 2009. The wind-turbine maker posted first-quarter Ebit of 21.1 million euros ($29 million), exceeding the 17.7 million euros estimated by analysts. The Hamburg-based company also forecast sales of as much as 1.6 billion euros in 2014. It had projected revenue of no more than 1.5 billion euros.
Aurubis AG gained 3.4 percent to 41.29 euros. The copper smelter said earnings this financial year will exceed last year’s, helped by a 20 percent increase in the premium for cathodes in Europe.
Deutsche Wohnen AG climbed 0.9 percent to 15.85 euros. Germany’s second-largest residential landlord by market value said funds from operations -- its key financial metric -- rose 91 percent to 59.1 million euros. The company also reiterated its forecast for FFO of at least 210 million euros this year.
RWE dropped 2.2 percent to 27.02 euros. Germany’s largest power producer said recurrent net income, which it uses to calculate payouts to shareholders, slid to 838 million euros from 1.3 billion euros a year earlier. That missed the 873.4 million-euro average of estimates compiled by Bloomberg. Sales declined 8.6 percent to 14.7 billion euros.
Evotec AG declined 4.1 percent to 3.49 euros. The drug-research company forecast that 2014 earnings before interest, taxes, depreciation and amortization will reach a similar level to last year.