Feb. 21 (Bloomberg) -- German stocks dropped from a six- month high, snapping two days of gains for the benchmark DAX Index, after Greece’s bailout failed to ease concern that the nation’s debt crisis will persist.
Deutsche Bank AG paced European lenders lower, falling more than 2 percent. ThyssenKrupp AG lost 2.7 percent after UBS AG downgraded the stock. Fresenius Medical Care AG retreated after its earnings forecast missed analysts’ estimates.
The DAX slid 0.6 percent to 6,908.18 at the close in Frankfurt after rallying 2.9 percent over the previous two days to the benchmark measure’s highest level since Aug. 1. The gauge had climbed as investors speculated finance ministers would agree on a debt deal to prevent the euro area’s first sovereign default. The HDAX Index lost 0.6 percent today.
“An agreement of the deal was widely expected,” said David Jones, chief market strategist at IG Index in London. There may be “an air of caution returning because we have been here on a few occasions before, only for a deal to be scuppered.”
Euro-area finance ministers approved the 130 billion-euro ($172 billion) bailout package early today after haggling into the night over the terms of new loans and a possible contribution by central banks. The deal includes a 53.5 percent writedown for investors in Greece’s debt.
Greece’s Austerity Program
In return for the new cash, Greece signed up to a program of austerity and economic reform aimed at slashing debt to 120.5 percent of gross domestic product by 2020 from about 160 percent last year.
Deutsche Bank, Germany’s largest lender, dropped 2.1 percent to 33.85 euros, falling for the first time in five days. Commerzbank AG slid 0.6 percent to 2.14 euros.
ThyssenKrupp lost 2.7 percent to 20.80 euros, paring yesterday’s 4 percent rally. UBS lowered its recommendation for Germany’s largest steelmaker to “sell” from “neutral.”
Fresenius Medical slipped 1 percent to 53.24 euros after the world’s biggest provider of kidney dialysis forecast 2012 sales and profit that fell short of analysts’ estimates.
The company predicted that revenue will rise 11 percent to about $14 billion and net income to $1.14 billion. Analysts had projected $14.5 billion and $1.23 billion, respectively, based on the average estimates compiled by Bloomberg.
Software AG climbed 1.7 percent to 28.69 euros after Deutsche Bank upgraded Germany’s second-largest software maker to “buy” from “hold.”
--Editors: Will Hadfield, Andrew Rummer
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