Bloomberg News

German Stocks Extend January’s Advance as Global Output Jumps

February 01, 2012

Feb. 1 (Bloomberg) -- German stocks rose for a second day, extending the DAX Index’s best January on record, as measures of manufacturing rose across the world.

Infineon Technologies AG led gains on the DAX after first- quarter operating profit fell less than expected and the chipmaker kept its outlook for this year. RWE AG climbed after Morgan Stanley added the stock to the list of its best ideas.

The DAX soared 2.4 percent to 6,616.64 at the close in Frankfurt, its biggest increase since Jan. 2. The gauge rallied 9.5 percent in January, the largest jump in the first month of a year since its start in 1988, amid speculation the global economy will withstand the impact of the euro area’s debt crisis and as central banks acted to fuel growth. The DAX dropped 15 percent in 2011. The HDAX Index also climbed 2.4 percent today.

“We are still quite cautious, but we have increased our exposure to developed equities to ‘neutral,’ mainly because there has clearly been an improvement in the U.S. economic momentum, which is positive,” Joost van Leenders, a strategist at BNP Paribas Investment Partners in Amsterdam, said in an interview today. “You have this increased liquidity. For now, we are more inclined to sell if the rally continues than to increase exposure.” Van Leenders helps oversee more than 500 billion euros ($660 billion).

Euro-Area Manufacturing

The euro area’s manufacturing industry contracted in January less than economists had predicted, according to a gauge published by London-based Markit Economics. A purchasing managers’ index for the U.K. jumped to an eight-month high, unexpectedly returning to growth, according to a separate report from Markit and the Chartered Institute of Purchasing and Supply. Chinese manufacturing indexes unexpectedly rose last month as the world’s second-biggest economy withstood weaker exports, a further report showed.

In the U.S., output grew at a faster pace in January. The Institute for Supply Management said its factory index rose to 54.1 in January, the highest level since June. The median estimate in a Bloomberg News survey of 81 economists was a reading of 54.5. Readings greater than 50 signal growth.

U.S. companies added 170,000 workers in January, reflecting job gains in services and at small businesses, according to a private report based on payrolls.

Infineon Gains

Infineon, Europe’s second-largest semiconductor maker, surged 5.6 percent to 7.37 euros. Operating profit in the fiscal first quarter, ended Dec. 31, fell to 141 million euros from 177 million euros a year earlier. Sales rose 2.6 percent to 946 million euros, the company said in a statement today. The average analyst estimates in a Bloomberg survey called for profit of 127 million euros and revenue of 934 million euros.

For fiscal 2012, ending Sept. 30, Infineon reiterated that sales will fall by a “mid single-digit” percentage and the operating margin will be a “low to mid-teens” figure.

RWE, Germany’s second-largest utility, advanced 4.9 percent to 30.68 euros. Morgan Stanley added the shares to its “best ideas” list, saying the company has a “more focused disposal program.”

Banks rose as a spokesman said Greece’s government expects to complete talks on a debt swap for private creditors within the next few days. Deutsche Bank AG, Germany’s biggest lender, increased 5.1 percent to 34.04 euros. Commerzbank AG, the second largest, climbed 4.2 percent to 1.91 euros.

Daimler AG jumped 3.8 percent to 43.85 euros. The world’s third-biggest luxury carmaker said that as of Jan. 23, Goldman Sachs Group Inc. held “directly financial or other instruments” giving it the right to buy shares equivalent to 7.07 percent of the voting rights in the company. Goldman Sachs currently holds 0.06 percent of the voting rights, the maker of Mercedes Benz cars said.

Deutsche Boerse AG gained 1.1 percent to 45.48 euros. The European Commission vetoed the German exchange operator’s plan to acquire NYSE Euronext after concluding that the takeover would hurt competition.

--With assistance from Peter Levring in Copenhagen. Editors: Will Hadfield, Andrew Rummer

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net

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


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