Bloomberg News

German Stocks Rise as European Rescue Plan Takes Shape

October 14, 2011

Oct. 14 (Bloomberg) -- German stocks advanced for the seventh day in eight as the Group of 20 finance ministers and central bankers met in Paris to discuss a European rescue plan.

HeidelbergCement AG rose 6.9 percent as Credit Suisse Group AG preferred the shares over Lafarge SA. SAP AG gained 2.6 percent as third-quarter results topped estimates. Deutsche Bank AG, Germany’s biggest lender, dropped 1.2 percent as Fitch Ratings put it under watch for a possible downgrade.

The benchmark DAX Index advanced 0.9 percent to 5,967.2 at the close in Frankfurt. The measure has jumped 14 percent over the last eight days for the biggest eight-day rally since November 2008. The index has still lost 21 percent from this year’s high on May 2. The broader HDAX Index added 1 percent today.

“We are beginning to see signs investors’ appetite for more risk is growing,” Mikkel Petersen, a senior equity adviser at Nordea Private Bank in Copenhagen said.

Deeper investor losses on Greek bonds, higher bank capital levels and increased firepower for bailouts and the International Monetary Fund may be part of the rescue plan taking shape in Paris. German banks are preparing for losses of as much as 60 percent, said three people with knowledge of the matter.

IMF Resources

Countries from China to Brazil are considering increasing IMF lending resources to help stem Europe’s woes, G-20 and IMF officials said. Talks are still at a preliminary stage as potential contributors wait for policy makers to give details of a rescue plan.

HeidelbergCement rose 3.4 percent to 30.23 euros as Credit Suisse said it preferred the company over Lafarge, citing reach in more markets and share valuation.

SAP AG gained 2.1 percent to 41.4 euros as the largest maker of business-management software reported third-quarter earnings that beat analysts’ estimates, with new mobile and real-time analytics offerings boosting sales.

Operating profit, based on non-international financial reporting standards, increased 23 percent to 1.13 billion euros ($1.56 billion) while sales on that basis rose 12 percent to 3.41 billion euros, the company said today. Analysts polled by Vara Estimates had estimated an operating profit of 1 billion euros.

Banks Decline

Deutsche Bank fell 1.2 percent to 27.31 euros, paring an earlier loss of as much as 3.9 percent, after Fitch included the lender in the group of European and international banks on negative watch for a cut in credit or viability grades. Other banks put on watch included Goldman Sachs Group Inc., Morgan Stanley, Credit Agricole SA, Credit Suisse, BNP Paribas SA, Societe Generale SA and Barclays Plc.

Commerzbank, Deutsche Bank’s smaller domestic competitor, declined 4.9 percent to 1.67 euros.

Bayer AG advanced 1.4 percent to 44.85 euros. Syngenta AG, which competes with Bayer on crop protection chemicals, forecast full-year revenue will rise “substantially.” A gauge of chemical companies on the Stoxx Europe 600 Index rallied 1 percent.

Infineon Technologies AG dropped 4.1 percent to 6.1 euros. Europe’s second-largest maker of semiconductors predicted lower profitability and declining sales this quarter as the European debt crisis makes clients more reluctant to spend.

--Editors: Srinivasan Sivabalan, Will Hadfield

To contact the reporter on this story: Peter Levring in Copenhagen at

To contact the editor responsible for this story: Andrew Rummer at

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