Bloomberg News

German Stocks Rise; Utilities Gain as Court Suspends Nuclear Tax

September 20, 2011

Sept. 20 (Bloomberg) -- German stocks climbed for the fifth time in six days, led by utilities, after a court suspended a tax on companies that use nuclear fuel.

EON AG and RWE AG, the country’s largest utilities, climbed more than 2.5 percent. SAP AG gained 1.8 percent after a U.S. judge asked Oracle Corp. to consider revising its request for a review of a court order overturning a damage award against the German software maker.

The benchmark DAX Index advanced 119.84, or 2.2 percent, to 5,535.75 at 2:46 p.m. in Frankfurt. The gauge climbed last week as Germany and France said Greece will remain a euro member and the European Central Bank announced measures with the Federal Reserve to ensure banks have enough dollars. The measure has still retreated 26 percent from this year’s high on May 2. The broader HDAX Index rose 2.1 percent today.

Federal Reserve officials tomorrow will probably announce a new program for monetary easing, according to economists in a Bloomberg News survey.

The Federal Open Market Committee will decide to replace short-term Treasuries in its $1.65 trillion portfolio with long- term bonds, according to 71 percent of 42 surveyed economists. The move, known as “Operation Twist” for its goal to bend the yield curve, will probably fail to reduce the 9.1 percent unemployment rate, 61 percent of the economists said. Among those, 15 percent predict it will be “somewhat harmful.”

Investor Confidence

German stocks gained even as the nation’s investor confidence fell to the lowest in more than 2 1/2 years in September.

The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict developments six months in advance, declined to minus 43.3 from minus 37.6 in August. Economists expected a drop to minus 45, according to the median of 37 estimates in a Bloomberg News survey.

Italy had its credit rating cut to A from A+ by Standard & Poor’s on concern that weakening economic growth and a “fragile” government mean the nation won’t be able to reduce the euro area’s second-largest debt burden.

RWE and EON jumped 2.6 percent to 25.64 euros and 2.9 percent to 15.62 euros, respectively, as a Hamburg court suspended a federal tax on companies that use nuclear fuel. The court said that the government should reimburse an unnamed power plant operator, which asked that the tax be suspended, the 96 million euros ($131 million) it had paid on the levy.

SAP, Siemens

SAP, the world’s biggest maker of business software, rose 1.8 percent to 37.16 euros. A U.S. federal judge asked Oracle Corp. to consider revising its request to seek a review of a court order overturning a $1.3 billion damage award against SAP.

Siemens AG gained 2 percent to 70 euros. Europe’s largest engineering company withdrew an unspecified amount of short-term deposits from Societe Generale SA in the first half of July, a person with knowledge of the matter said.

Siemens withdrew the deposits from the Paris-based bank before the results of the European Union stress tests were made public on July 15, the person said, declining to be identified because the matter is confidential. The funds may have been transferred to the European Central Bank, the person said.

Deutsche Lufthansa AG slumped 5.5 percent to 10.20 euros, the biggest drop in a month. The airline cut its earnings forecast and said it will deepen capacity cuts for the winter timetable after last month’s results were weaker than expected and forward bookings slumped.

--Editor: Andrew Rummer

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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