Bloomberg News

Germany’s DAX Index Advances, Led by Bayer, Linde, Volkswagen

October 11, 2011

Oct. 11 (Bloomberg) -- German stocks jumped, with the benchmark DAX Index rallying for a fifth day, its longest winning streak since July, as carmakers and chemical companies advanced.

Bayer AG led the gainers, increasing more than 3 percent. Linde AG climbed 2 percent. Carmakers Volkswagen AG, Bayerische Motoren Werke AG and Daimler AG rose.

The benchmark DAX Index gained 0.3 percent to 5,865.01 at the close in Frankfurt. The gauge rose 12 percent over the past five days as investors speculated that policy makers will act to support the region’s debt crisis and U.S. jobs data spurred optimism that the world’s largest economy will avoid a recession. The broader HDAX Index also advanced 0.3 percent today.

“Everyone is waiting to see what will come out of the third-quarter earnings season with Alcoa kicking off today,” said Heinz-Gerd Sonnenschein, an equity strategist at Deutsche Postbank AG in Bonn.

Alcoa Inc. will become the first company in the Dow Jones Industrial Average to issue third-quarter earnings after the U.S. market closes today. The largest U.S. aluminum producer may report a slowdown in its earnings recovery after the lightweight metal used in beverage cans and aircraft erased all this year’s price gains.

Slovakia may approve the euro area’s new bailout fund even as a political storm threatens to topple Prime Minister Iveta Radicova’s governing coalition.

Slovakia Vote

Slovakia’s largest opposition party, which pledged to reject the motion today, will back the European Financial Stability Facility in a second vote, if lawmakers reject it today, Robert Fico, the group’s leader, told reporters in Bratislava today. That would give the measure a majority. Parliament has not set a date for a second vote.

Slovak Finance Minister Ivan Miklos predicted that lawmakers will ratify the EFSF this week. Slovakia is the only country in the 17-nation euro area that has yet to ratify the measure, after Malta’s parliament approved the fund yesterday.

“It should be OK for the EFSF, but not for the government of Slovakia,” Sonnenschein said.

European Central Bank President Jean-Claude Trichet said the debt crisis threatens the region’s financial system as officials raced to put together a new plan to end the turmoil.

’Systemic Dimension’

“The crisis has reached a systemic dimension,” Trichet told lawmakers in Brussels today in his capacity as head of the European Systemic Risk Board. “Sovereign stress has moved from smaller economies to some of the larger countries. The crisis is systemic and must be tackled decisively.”

The ECB opposes any backsliding from a July 21 accord on a second Greek bailout, a central bank official said yesterday. An appeal to “fully implement all aspects” of the July road map was inserted into last week’s monthly policy statement as a warning to Germany, the official said under condition of anonymity.

Bayer advanced 3.4 percent to 43.61 euros. Linde, the gases and engineering company, climbed 2 percent to 109.85 euros.

Volkswagen increased 1.7 percent to 108.10 euros. BMW rose 1.4 percent to 53.75 euros. Daimler jumped 1.4 percent to 35.85 euros.

--With assistance from Peter Levring in Copenhagen. Editors: Srinivasan Sivabalan, Will Hadfield

To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net

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


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