Bloomberg News

German Stocks Close Little Changed; Beiersdorf Shares Advance

January 26, 2012

Jan. 25 (Bloomberg) -- German stocks were little changed as the nation’s business confidence climbed, while the European Central Bank was said to remain opposed to any restructuring of its Greek bond holdings, boosting speculation the nation will fail to win a deal to reduce its debt.

Deutsche Post AG retreated 2.2 percent after being ordered to repay government subsidies. Beiersdorf AG rallied 3.4 percent as the maker of Nivea skin cream published earnings that topped estimates.

The benchmark DAX Index advanced less than 0.1 percent to 6,421.85 at the close in Frankfurt. The gauge has surged 8.9 percent this year amid speculation the global economy is strong enough to withstand the effect of Europe’s debt crisis. The broader HDAX Index climbed 0.1 percent today.

“Talks with Greek debt holders once more appear to have hit the buffers,” said Rupert Osborne, a futures dealer at IG Index in London. “Some would say the market is being surprisingly patient regarding these ongoing negotiations, but if this lack of progress ends up being a recurring theme it seems unlikely that traders will continue having such a sanguine view.”

A report today showed German business confidence jumped more than economists forecast in January to a five-month high, signaling Europe’s largest economy may avoid a recession. The Ifo institute’s business climate index, based on a survey of 7,000 executives, climbed to 108.3 from 107.3 in December.

ECB Debt Holdings

The ECB remains firmly opposed to any restructuring of its Greek bond holdings as the debt was acquired for monetary policy purposes, according to two people familiar with the Governing Council’s stance. While the ECB faces pressure to join private- sector investors in taking losses on Greek debt, the bank sees this as potentially damaging to confidence in the institution if it were to take part, said the people, who declined to be identified because the matter is confidential.

European finance ministers meeting in Brussels signaled they would push Greece’s private investors to accept bigger losses after bondholders made what Charles Dallara, managing director of the Institute of International Finance, described as their “maximum” offer.

Investors have yet to embrace tentative gains in fighting Europe’s debt crisis, according to a Bloomberg Global Poll of 1,209 investors, analysts and traders who are Bloomberg subscribers. Forty-eight percent of of respondents identified the euro area as one of the worst to invest in and 67 percent predicted that any perceived improvement is temporary and the crisis will deepen again.

Deutsche Post Drops

Deutsche Post lost 2.2 percent to 12.52 euros. European Union regulators ruled that the region’s largest mail carrier must return between 500 million euros ($648 million) and 1 billion euros in payments from the German government to cover workers’ pension costs.

Beiersdorf surged 3.4 to 45.44 euros, the biggest gain since November. The company said adjusted earnings before interest and taxes fell 7.6 percent in 2011 to 646 million euros, beating the 624.1 million-euro average estimate of 24 analysts surveyed by Bloomberg.

Deutsche Boerse AG gained 1.6 percent to 43.55 euros as EU Competition Commissioner Joaquin Almunia said antitrust regulators will rule on its planned takeover of NYSE Euronext on Feb. 1 “without any doubt.” Financial services commissioner Michel Barnier said he “will take the necessary personal time” to review the merger before giving his opinion.

“There might be speculations on the the deal still passing,” said Philipp Haessler, analyst at at Equinet AG in Frankfurt.

--Editors: Andrew Rummer, Will Hadfield

To contact the reporter on this story: Konstantin Riffler in Frankfurt at kriffler@bloomberg.net

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


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