German Stocks Advance as Obama Postpones Syria Decision
German stocks advanced, with the benchmark DAX (DAX) rising to its highest level in more than three months, as U.S. President Barack Obama postponed a decision on whether to take military action against Syria.
Commerzbank AG added 3 percent after Citibank raised its earnings estimate for Germany’s second-largest lender. RWE AG (RWE) and EON SE each rose more than 4 percent as a gauge of utilities climbed the most of the 19 industry groups in the Stoxx Europe 600 Index. K+S AG (SDF) fell 0.7 percent after BMO Capital Markets downgraded its rating on the potash producer.
The DAX increased 0.6 percent to 8,495.73 at the close of trading in Frankfurt, for its sixth day of gains. The index climbed 2.1 percent last week as manufacturing growth in the U.S. and China beat projections. The broader HDAX Index rose 0.5 percent today.
“After the correction we saw in the second half of August, investors are looking for an excuse to buy back into the market and it seems relief around Syria is providing the excuse,” Raimund Saxinger, a fund manager at Frankfurt-Trust Investment GmbH, which oversees about $22 billion, said in a telephone interview.
The DAX fell 4 percent from a monthly high on Aug. 14, amid speculation the Federal Reserve will pare stimulus measures and concern about possible U.S. military action against Syria.
The volume of shares changing hands in DAX-listed companies was 22 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.
Obama said yesterday in an address from Washington that he will pursue a proposal by Russia to have Syria surrender its stockpiles of chemical weapons to international authorities. He had said that he would ask Congress to authorize the use of military force against Syrian President Bashar al-Assad’s regime following an Aug. 21 chemical attack that the U.S. said killed more than 1,400 people.
Commerzbank rose 3 percent to 9.35 euros, its highest price since Mar. 13. Citibank raised its 2014 earnings estimate by 3 percent, citing better second-quarter revenue at the lender’s corporate and markets division.
RWE and EON gained 6.6 percent to 25.06 euros and 4.8 percent to 13.45 euros, respectively.
K+S retreated 0.7 percent to 20.94 euros. BMO Capital Markets downgraded Europe’s biggest potash distributor to underperform, similar to a sell recommendation, from market perform. The financial services provider set a price target of 18 euros on the shares.
Dialog Semiconductor Plc (DLG) slumped 7.6 percent to 14.33 euros, its largest drop since April 17. Apple Inc., the company’s biggest customer for smartphone chips, yesterday unveiled two new iPhone models.
“With Apple apparently focusing on margins rather than volume, Dialog might be burdened near-term,” Deutsche Bank AG said in a note to clients.
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