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German Stocks Gain as Commerzbank, ThyssenKrupp Rally; EON Drops

January 24, 2012

Jan. 23 (Bloomberg) -- German stocks advanced to a five- month high, led by gains in banking shares, as policy makers said Greek debt-swap talks are making progress.

Commerzbank AG surged 13 percent and Deutsche Bank AG rose 3.1 percent, respectively, following a rally in European banking shares. ThyssenKrupp AG gained 2.6 percent as Germany’s largest steelmaker discussed merging its Inoxum stainless unit with Outokumpu Oyj of Finland. EON AG and RWE AG, Germany’s biggest utilities, fell more than 2 percent.

The DAX Index rallied 0.5 percent to 6,436.62 at the close in Frankfurt, the highest since Aug. 3. The gauge soared 4.3 percent last week as Spain and France sold bonds at lower yields and a report showed that fewer Americans than predicted filed claims for jobless benefits. The broader HDAX Index also rose 0.5 percent today.

“German banks are increasingly becoming detached from risks in the financial markets,” Robert Halver, the head of research at Baader Bank AG in Frankfurt, said.

European officials will forge ahead today with crafting a long-term plan to tackle the region’s debt crisis as talks on a Greek debt swap entered a second week.

France’s Finance Minister Francois Baroin said at a press conference in Paris that negotiations on Greek debt are making “tangible progress.” German Finance Minister Wolfgang Schaeuble said he’s confident the discussions will be completed. EU Economic and Monetary Affairs Commissioner Olli Rehn said the talks should conclude “shortly.”

‘Maximum’ Offer

Bondholders negotiating the Greek debt swap made their “maximum” offer, leaving it to the European Union and International Monetary Fund to decide whether to accept the deal, said Charles Dallara, who’s representing private creditors in the talks.

Dallara, managing director of Institute of International Finance, said he’s hopeful the EU an IMF will agree to terms for private-investor involvement in a rescue package to avert a default and collapse of the Greek economy. He declined to elaborate on the terms discussed in talks that resumed Jan. 18 and remained inconclusive as EU finance ministers prepared to meet today.

Commerzbank climbed 13 percent to 1.95 euros and Deutsche Bank gained 3.1 percent to 33.51 euros. Banking shares were the best performers in the benchmark Stoxx Europe 600 Index today.

ThyssenKrupp rose 2.6 percent to 21.26 euros, the highest price since October. Options for the Inoxum unit include an initial public offering, spinoff or sale to an investor, Essen- based ThyssenKrupp said.

RWE dropped 2.4 percent to 26.29 euros, and EON declined 2.2 percent to 15.88 euros. German power for next year was little changed after last week dropping to the lowest level on record.

--Editors: Andrew Rummer, Angela Cullen

To contact the reporters on this story: Julie Cruz in Frankfurt at; Konstantin Riffler in Frankfurt at

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

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