Bloomberg News

German Stocks Rise on Consumer Confidence Data; Volkswagen Gains

February 28, 2012

German stocks rose for the second time in three days as consumer confidence reports in Germany and the U.S. bolstered optimism about the global economy.

Volkswagen AG (VOW), Infineon Technology AG and HeidelbergCement AG were among the biggest gainers. Q-Cells rallied 3.3 percent after the solar company won additional time to pay back debt. Deutsche Lufthansa AG (LHA) gained as crude oil eased.

The DAX Index climbed 0.6 percent to 6,887.63 at the close in Frankfurt after swinging between gains and losses at least five times today. The broader HDAX Index also advanced 0.6 percent today.

“The market is very reactive to data as everyone is looking for which way the U.S. economy is heading,” said Manoj Ladwa a senior trader at ETX Capital in London. “German numbers also seem to be coming in relatively good overall. The historically strong economies seem to be fairly robust.”

GfK SE, the Nuremberg-based market research company, said German consumer confidence will climb to the highest level in a year next month as falling unemployment and slowing inflation boost income expectations.

Confidence among U.S. consumers rose in February to the highest level in a year, showing households may sustain spending and drive the economy.

The Conference Board’s index increased more than forecast, rising to 70.8 from a revised 61.5 in January, figures from the New York-based private research group showed today. Economists predicted the gauge would climb to 63, according to the median estimate in a Bloomberg News survey.

Irish Referendum

The DAX Index (DAX) briefly erased gains after worse than forecast U.S. durable goods orders and as Irish Prime Minister Enda Kenny said Ireland will hold a referendum to ratify the European fiscal compact.

Kenny, speaking in the Dublin parliament, said the government decided to hold a vote after receiving legal advice from the state’s attorney general. In contrast to two previous Irish referendums in European policies, a veto wouldn’t sink the treaty, which requires support from just 12 of the 17 euro countries to take effect.

All but eight companies on Germany’s benchmark gauge climbed today. Volkswagen AG gained 1.8 percent to 140.80 euros as the carmaker awarded Chief Financial Officer Hans Dieter Poetsch a third five-year term.

Infineon, Europe’s second-largest semiconductor maker, climbed 2.2 percent to 7.73 euros. HeidelbergCement AG (HEI), Europe’s third-largest cement maker, gained 2 percent to 40.25 euros.

Q-Cells (QCE) rose 3.3 percent to 31.4 euro cents after creditors backed the solar-cell maker’s proposal to defer the maturity of 200 million euros of bonds to April 30 from today.

Germany’s solar manufacturers are under pressure from Chinese rivals, while facing a record cut to solar subsidies next month. Berlin-based module maker Solon SE and Solar Millennium AG filed for insolvency in December.

Lufthansa (LHA) climbed 1.7 percent to 10.34 euros, pacing a rebound in European airlines after crude oil declined for a second day in New York. The airline has still lost 2.1 percent so far this month after crude oil rallied on tensions in Iran.

Munich Re (MUV2) climbed 0.8 percent to 110.65 euros after Exane BNP Paribas reiterated its “outperform” rating for the world’s largest reinsurer and raised its price estimate for the shares by 8 percent to 122 euros.

Smaller rival Hannover Re dropped 1.7 percent to 41.85 euros. Exane lowered its recommendation for the shares to “underperform” from “neutral.”

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

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


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