Bloomberg News

German Stocks Advance as Euro-Area Ministers Meet on Debt Crisis

November 30, 2011

Nov. 29 (Bloomberg) -- German stocks rose, for the biggest three-day rally in the benchmark DAX Index in more than seven weeks, as euro-area finance ministers met in Brussels to discuss the region’s sovereign-debt crisis.

BASF SE gained 2.1 percent as the world’s largest chemical company raised its sales target for the end of this decade. K+S AG added 3 percent after saying it will invest more than $3 billion to develop a Canadian mineral deposit bought this year.

The DAX increased 54.58, or 1 percent, to 5,799.91 at the close in Frankfurt. The gauge has advanced 6.9 percent in the last three days, for its biggest jump since Oct. 7. The broader HDAX Index climbed 0.9 percent today.

“There is no doubt that the policy debate is edging towards schemes that address the issues,” said Dominic Wilson, the chief market economist at Goldman Sachs Group Inc. in Frankfurt. We are “still skeptical of a quick euro-zone solution. We would caution against too much optimism without a lot more meat on the policy ‘bones’ that are likely to float out.”

The DAX has still fallen 5.6 percent this month as surging bond yields in Italy, Spain and France fueled concern that the debt crisis is spreading. The gauge has retreated 16 percent this year.

Europe’s effort to expand its bailout fund to 1 trillion euros ($1.3 trillion) is falling short, forcing renewed consideration of a role for the European Central Bank in insulating Spain and Italy from the debt crisis, two officials familiar with the discussions said.

Finance ministers will hold an initial discussion on channeling ECB loans to cash-strapped euro nations through the International Monetary Fund, aiming to bring the central bank to the front lines without violating its ban on direct lending to governments, said the people, who declined to be identified because the talks are at an early stage.

German Trade Surplus

German exports will cross the 1 trillion-euro ($1.33 billion) mark for the first time in 2011 as demand for investment goods from developing nations offsets waning demand in the euro region, the BGA Exporters and Wholesalers Group forecast today.

Exports will grow an estimated 12 percent this year to 1.08 trillion euros and imports increase 14 percent to 919 billion euros, creating a trade surplus of 156 billion euros. Exports may grow at least 6 percent next year to 1.14 trillion euros, the BGA said.

Italy sold 7.5 billion euros of bonds at average yields above the 7 percent level that forced Greece, Ireland and Portugal to seek bailouts.

BASF SE gained 2.1 percent to 50.56 euros as the world’s largest chemical company raised its sales target for the end of this decade. The maker of coatings, polymers and pesticides forecast sales of 115 billion euros by 2020 and earnings before interest, taxes, depreciation and amortization of 23 billion euros, BASF said today in a statement.

K+S AG advanced 3 percent to 39.46 euros. Europe’s biggest potash supplier will develop a Canadian mineral deposit acquired this year, investing C$3.25 billion ($3.1 billion) after outgrowing reserves in Germany.

--Editors: Srinivasan Sivabalan, Will Hadfield

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net; Julie Cruz at jcruz6@bloomberg.net

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


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus