Bloomberg News

German Stocks Decline; Metro, BASF Fall, Lufthansa Rises

July 09, 2012

German stocks fell for a fourth day as a rebound in exports and Chinese Premier Wen Jiabao’s signaling of further policy easing were overshadowed by a decline in Japanese machinery orders.

Metro AG (MEO) fell 6.3 percent after its chief executive said there would be a small increase at best in German consumption this year. SAP AG fell 1.8 percent. BASF SE dropped 1.1 percent as Societe Generale SA cut the stock’s profit target. Deutsche Lufthansa AG (LHA) rose 1.8 percent.

The DAX Index (DAX) fell 0.4 percent to 6,387.57 at the close in Frankfurt. The gauge has still climbed 7 percent from its 2012 low on June 5 as Greece formed a new government and European Union leaders opened the door to directly recapitalizing lenders using the euro area’s permanent bailout fund. The broader HDAX Index declined 0.3 percent today.

“Weakness in Japanese machine orders following on from the weak U.S. jobs number makes for a skeptical Monday market,” said Daniel Weston, a portfolio adviser at Schroeder Equities GmbH in Munich. “Inflation weaker in China shows confidence is low, further stimulus is on the agenda, but probably not imminent considering they only lowered rates last week.”

German exports rebounded more than economists forecast in May, helping Europe’s largest economy to weather the sovereign debt crisis. Exports, adjusted for work days and seasonal changes, jumped 3.9 percent from April, when they fell 1.7 percent, the Federal Statistics Office in Wiesbaden said today. Economists had forecast an increase of 0.2 percent, according to the median of 13 estimates in a Bloomberg survey. Imports surged 6.3 percent.

China Slowdown

Chinese premier Wen Jiabao said the world’s second biggest economy faces “relatively large” downward pressure. The government will intensify fine-tuning of policies even as measures taken since April are helping to stabilize a slowdown, he said, the official Xinhua News Agency reported yesterday.

Japanese machinery orders, an indicator of capital spending, fell 14.8 percent in May from the previous month, the Cabinet Office said, the biggest drop since 2001. Economists expected a 2.6 percent decline.

Metro, Germany’s biggest retailer, fell 6.3 percent to 20.43 euros. Chief Executive Officer Olaf Koch forecast a “small increase at best” in German consumption this year, which will have a “significant impact” on the retailer’s business, Bild am Sonntag reported, citing an interview.

SAP Declines

SAP AG, the largest maker of business software, lost 1.8 percent to 44.71 euros.

BASF SE (BAS) dropped 1.1 percent to 55.46 euros. Societe Generale cut its price estimate for the world’s biggest chemical maker by 20 percent to 55 euros because of the weak macro- economic outlook.

Salzgitter AG (SZG), Germany’s second-largest steelmaker, declined 4.2 percent to 29.83 euros. A measure of basic resources was the worst performer in the Stoxx 600.

Kontron AG, a maker of miniature computers for slot machines and drone aircraft, slid 6.3 percent to 4.78 euros as the stock was downgraded to hold from buy by Hauck & Aufhauser Privatbankiers KGaA equity analyst Tim Wunderlich. The 12-month target price is 5.60 euros per share, according to Hauck & Aufhauser.

Deutsche Lufthansa, Europe’s second-biggest airline, gained 1.8 percent to 9.44 euros.

ThyssenKrupp, Germany’s largest steelmaker, surged 2.2 percent to 13.42 euros. “A floor may be in sight” for industrial-exposed metals such as base metals, silver and platinum, Hussein Allidina, head of commodities research at Morgan Stanley, wrote in a research note. The third quarter will be the bottom for the most recent price correction, he said.

To contact the reporter on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net

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


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