Bloomberg News

German Stocks Drop as Manufacturing Slows; TUI, Lufthansa Fall

February 22, 2012

Feb. 22 (Bloomberg) -- German stocks retreated for a second day after manufacturing and services expansion unexpectedly slowed amid declining orders at factories.

TUI AG, Europe’s largest travel company, slumped 7.6 percent after Banco CAM SAU sold a 77.5 million-euro ($103 million) stake. Deutsche Lufthansa AG lost 2.6 percent after saying five days of strikes at Frankfurt Airport have cost it more than 10 million euros as it canceled further flights today.

Germany’s benchmark DAX Index fell 0.9 percent to 6,843.87 at the close in Frankfurt. The gauge has still advanced 16 percent so far this year, outperforming a 12 percent climb in gold and every developed stock market except Hong Kong. Yesterday, the measure declined from a six-month high as an agreement on Greece’s bailout failed to ease concern that the nation’s debt crisis will persist. The broader HDAX also lost 0.9 percent today.

“Investors have been looking for an excuse to sell stocks and consolidate after the very strong start to the year,” said Henrik Henriksen, the chief investment strategist at PFA Pension A/S in Copenhagen, where he helps manage $45 billion. “The outlook for risky assets such as stocks is still good, though systemic risks persist in Europe, while it’s hard to see what should drive the markets in the immediate future.”

A German composite index based on a survey of purchasing managers in services and manufacturing fell to 52.9 this month from 53.9 in January, London-based Markit Economics said today. A reading above 50 indicates expansion. A manufacturing gauge for Germany slid to 50.1 this month from 51, while a services index for the country fell to 52.6 from 53.7.

TUI Slides

TUI slumped 7.6 percent to 5.99 euros after Banco CAM sold 12.9 million shares for 6.05 euros apiece.

The travel company has still jumped 25 percent this year as it said it will sell a stake in Hapag-Lloyd and may dispose of its remaining holding in the shipper in an initial public offering. It also forecast higher revenue for 2012.

Lufthansa fell 2.6 percent to 10.49 euros. The Gewerkschaft der Flugsicherung union will suspend strike action at Frankfurt airport tonight after accepting an offer of unconditional talks.

Deutsche Bank AG, Germany’s largest lender, dropped 2.4 percent to 33.04 euros. Commerzbank AG, the second-biggest bank, fell 3.3 percent to 2.07 euros.

--Editors: Andrew Rummer, Will Hadfield

To contact the reporter on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net

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


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