Bloomberg News

German Stocks Advance to a Four-Week High on Manufacturing Data

January 03, 2012

Jan. 2 (Bloomberg) -- German stocks advanced on the first trading day this year, following a 15 percent annual loss for the benchmark DAX Index in 2011, as the country’s manufacturing output beat estimates in December.

Henkel AG and ThyssenKrupp AG rose more than 3 percent. Sunways AG surged 21 percent after China’s LDK Solar Co. said it intends to take over the company. Solarworld AG climbed after a report that Chief Executive Officer Frank Asbeck called fourth- quarter sales “pleasantly good.”

The DAX increased 3 percent to 6,075.52 at the close in Frankfurt, its highest price since Dec. 5. The gauge retreated last year, for its first full-year loss after the 40 percent plunge in 2008, amid speculation that the euro area’s fiscal crisis will force at least one nation to default on its debt. The broader HDAX Index added 2.9 percent today.

“Big crises have a habit of creating big investment opportunities,” said John Chatfeild-Roberts, chief investment officer of London-based Jupiter Asset Management Ltd., which manages 20 billion pounds ($32 billion). “Europe is having an especially big crisis. Therefore, over time, we can expect to see some wonderful opportunities unfolding. The point will come when the scales start to tilt back to favor increasing risk levels but we are not there yet.”

A manufacturing gauge based on a survey of purchasing managers in Germany rose to 48.4 in December, beating the initial estimate of 48.1 published on Dec. 15. A reading below 50 indicates contraction.

Today’s trading volume on the DAX was 42 percent of the average in the last 100 days.

European Debt

Some 157 billion euros ($203 billion) in debt will mature in the 17-member euro area in the first three months of 2012, according to UBS AG. National leaders have pledged to draft a stricter rulebook for controlling government spending. German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet in Berlin on Jan. 9 to work out the details.

In her New Year’s address, Merkel said she expects turbulence in 2012 as she does “everything” to save the euro and end the sovereign-debt crisis. Greek Prime Minister Lucas Papademos said in his New Year’s message that the country faces a difficult year and must continue efforts to stay in the euro.

The preferred shares of Henkel, the maker of industrial adhesives and Soft Scrub cleaners, increased 3.3 percent to 46.06 euros. ThyssenKrupp, Germany’s biggest steelmaker, gained 4.5 percent to 18.52 euros.

Daimler AG increased 4.3 percent to 35.37 euros. The carmaker said that it has delivered more than two million Mercedes sport-utility vehicles since their introduction.

Target for 2012

The company wants to produce a record 988,110 Mercedes-Benz brand vehicles in Germany in 2012, Automotive News Europe reported yesterday, citing internal company documents.

RWE AG, Germany’s second-largest utility, advanced 5.3 percent to 28.60 euros, a third day of gains for the longest winning streak since Oct. 10. The company is among stocks on CA Cheuvreux’s German selected list for 2012. Larger competitor EON AG jumped 4.5 percent to 17.42 euros.

Sunways jumped 21 percent to 1.87 euros, the largest advance since June. The company said LDK Solar would buy 33 percent in the company and offered to purchase the remaining stake for 1.90 euros per share. Q-Cells SE rose 5.2 percent to 54.5 euro cents.

Solarworld climbed 3.1 percent to 3.35 euros as Asbeck told Euro am Sonntag that the company will meet its full-year target of more than 1 billion euros in sales.

-- With assistance from Jeff Black in Frankfurt. 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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