German Stocks Climb for Second Straight Day as BMW, HeidelbergCement Gain
German stocks climbed as earnings from Bayerische Motoren Werke AG (BMW) and HeidelbergCement AG (HEI) topped estimates, the European Central Bank cut interest rates and Greece signaled it will cancel a vote on its bailout package.
BMW, the world’s largest maker of luxury vehicles, and HeidelbergCement, the third-biggest cement maker, rallied at least 3 percent. MAN SE (MAN) surged 7 percent as Volkswagen AG (VOW) received the final regulatory approval needed to take a majority stake in the truckmaker.
The DAX Index (DAX) gained 2.8 percent to 6,133.18 at the close in Frankfurt. The gauge has still fallen 19 percent from this year’s high on May 2 amid concern global economic growth is slowing and policy makers are struggling to contain Europe’s debt crisis. The broader HDAX Index (HDAX) also rose 2.8 percent today.
“Markets are optimistic that there may not be a referendum,” said Markus Wallner, an equity strategist at Commerzbank AG in Frankfurt. “This means for investors that things can go on as planned, without interference from Papandreou that threatened the bailout plan.”
Greek Prime Minister George Papandreou signaled he won’t call a referendum on the euro-are rescue package agreed on Oct. 26 as it may call into question Greece’s membership of the euro. He said the country belongs in the currency bloc and welcomed support shown by the main opposition New Democracy party for the bailout deal.
ECB Rate Cut
The ECB cut interest rates at Mario Draghi’s first meeting as president. Bank officials unanimously lowered the benchmark rate by 25 basis points to 1.25 percent, confounding 51 of 55 economists in a Bloomberg News survey.
In the U.S., Federal Reserve Chairman Ben S. Bernanke signaled additional monetary stimulus may be needed to lower U.S. unemployment as policy makers projected little acceleration in growth after last quarter’s pickup.
Potential actions are “on the table,” including a third round of securities purchases, extending the period of record- low interest rates or being more specific about when rates would rise, Bernanke said at a press conference yesterday after European markets closed.
Bernanke warned that economic improvement will probably be “frustratingly slow,” with policy makers forecasting a 1 percentage-point drop in the jobless rate to about 8 percent over two years.
BMW gained 4.6 percent to 60.61 euros as the company reported third-quarter profit that beat estimates as demand for the X3 sport-utility vehicle offset lower 1-Series sales.
Earnings before interest and taxes rose 44 percent to 1.72 billion euros from 1.19 billion euros a year earlier. That topped the average 1.58 billion-euro analyst estimate.
HeidelbergCement added 3.5 percent to 33.54 euros after third-quarter profit exceeded analyst estimates as sales grew faster than anticipated in markets like Indonesia. Operating income fell 2 percent to 562 million euros, beating the average estimate of 546.6 million euros in a Bloomberg survey.
MAN surged 7 percent to 67.46 euros as Volkswagen received the final regulatory approval needed to take a majority stake in the company. Chinese competition authorities have given the go- ahead for VW to increase its MAN holding to 55.9 percent of the voting rights. Volkswagen rose 2.9 percent to 130.85 euros.
Metro AG (MEO) rallied 9 percent to 36.56 euros, the largest gain since September. Germany’s biggest retailer said it’s confident it can meet a target of 5 percent earnings growth this year, or 10 percent if Christmas business is “considerably better” than a year ago.
Allianz SE (ALV), Europe’s biggest insurer, climbed 3.2 percent to 78.72 euros as a gauge of insurers posted the best performance of the 19 industry groups in the Stoxx 600, rising 3.3 percent. Munich Re, the world’s largest reinsurer, added 2.4 percent to 95.77 euros.
Q-Cells SE (QCE), the German solar cell and module maker, soared 25 percent to 91.5 euro cents after winning a contract to build a solar park in Brandenburg-Briest, Germany, with a capacity of 91 megawatts. It will be the largest photovoltaic park in Europe, according to the company.
Rheinmetall AG (RHM) sank 7.6 percent to 35.12 euros as it said it won’t stage an initial public offering of its automotive unit, citing stock-market declines.
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