German stocks declined, paring their biggest two-day rally since April, as the country’s exports decreased more than economists had predicted and Spain’s debt rating was downgraded to within two notches of junk.
Commerzbank AG (CBK), Germany’s second-biggest lender, slid 3.1 percent. ThyssenKrupp AG (TKA), Germany’s largest steelmaker, retreated 3.8 percent after its credit rating was cut yesterday by Standard & Poor’s.
The DAX Index (DAX) dropped 0.2 percent to 6,130.82 at the close in Frankfurt. The gauge has still risen 1.3 percent this week. The benchmark measure has tumbled 14 percent from its 2012 high on March 16 on growing concern that Greece will leave the euro currency union. The broader HDAX Index fell 0.3 percent today.
“The export data shows the European debt crisis is affecting the real economy in the same way as in 2009 and the second half of 2011,” said Robert Halver, head of capital markets research at Baader Bank AG. “The bad mood is the biggest driver for the economy. This is a homemade crisis as European policy cannot solve the debt crisis.”
German exports fell 1.7 percent in April, the Federal Statistics Office in Wiesbaden said today. Economists had predicted a drop of 0.7 percent, according to the median of 14 estimates in a Bloomberg News survey. Exports increased 0.8 percent in March.
German Export Growth
German export growth has suffered as eight euro-area countries entered a recession. China’s economy, Germany’s seventh-biggest export market, slowed in the first quarter.
Germany’s Economy Ministry said its forecast for stronger economic growth in the second-half of this year may fail to come true. It cited multiplying risks from the impact of the debt crisis to the outlook for the U.S. and Chinese economies.
“Worries about economic growth, above all in the euro area but also in the U.S. and China, have once again come clearly to the fore,” the ministry stated in its economic report for June.
“Everything is very uncertain,” said Simon Denham, chief executive officer of Capital Spreads in London. “As soon as investors see any kind of opportunity for profit they are taking it, which is why it is easy to see 50-to-60 point price trading ranges.”
Commerzbank dropped 3.1 percent to 1.39 euros.
ThyssenKrupp decreased 3.8 percent to 12.04 euros. The steelmaker’s rating was cut to BB from BB+ by S&P after the ratings company predicted a “very weak” performance this year. S&P cited high losses from its U.S. business and lower-than- estimated profit from its European operations.
Volkswagen AG (VOW) fell 1.3 percent to 121.85 euros after Europe’s largest carmaker was added to UBS AG’s list of least preferred European automakers.
Bayerische Motoren Werke AG (BMW), the world’s biggest maker of luxury cars, slid 1.3 percent to 58.82 euros. BMW Brilliance Automotive Ltd., BMW’s joint venture in China, started to take orders for five models of the company’s new generation extended and standard 3-series today, it said in a statement.
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