Bloomberg News

German Stocks Decline as Finance Ministers Meet on Greece

November 26, 2012

German stocks declined, paring last week’s biggest advance this year, as euro-area finance ministers met to discuss further financial aid for Greece.

ThyssenKrupp AG (TKA) dropped 5.1 percent after a report that the company has delayed the sale of Steel Americas. Deutsche Bank AG (DBK) lost 1.9 percent. Deutsche Lufthansa AG (LHA) climbed 3 percent after Espirito Santo SA upgraded its recommendation on the shares of Europe’s second-largest airline.

The DAX Index (DAX) lost 0.2 percent to 7,292.03 at the close of trading in Frankfurt. The equity benchmark has still rallied 22 percent from this year’s low on June 5 as the European Central Bank approved an unlimited bond-buying program and the U.S. Federal Reserve started a third round of asset purchases. The broader HDAX Index also fell 0.2 percent today.

“It is a case of wait and see at the moment, concerning what happens in Brussels regarding Greece,” Robert Halver, head of capital markets research at Baader Bank AG in Frankfurt, said in a telephone interview. “It is an emotional problem rather than a financial problem. If there is only a small solution it would be sufficient to support the markets.”

Euro-area finance ministers will push the International Monetary Fund and central bankers to endorse new plans to save Greece from the fiscal abyss. They will brief the IMF and European Central Bank on “further concessions” that would plug Greece’s deficit gap without forcing a writeoff of official loans, Austria’s Maria Fekter said today before the ministers’ fourth round of talks on the Greek crisis in two weeks.

A deal is “practically finalized, there are just a few centimeters to go,” French Finance Minister Pierre Moscovici said.

Confidence Fall

German consumer confidence will drop for the first time in seven months in December as Europe’s debt crisis damps households’ income expectations and willingness to spend, GfK SE said today.

The market research company forecast that its consumer- sentiment index, based on a survey of about 2,000 people, will fall to 5.9 from a revised 6.1 in November. That would be the first decline since May and the lowest reading since August. Economists predicted a retreat to 6.2 from GfK’s initial 6.3 estimate for November, according to the median of 27 estimates in a Bloomberg News survey.

ThyssenKrupp lost 5.1 percent to 15.93 euros, its biggest drop in more than eight months. The steelmaker has delayed the sale of its Steel Americas operation, the Financial Times Deutschland reported, citing a company timetable. ThyssenKrupp is unlikely to get the 7 billion euro ($9.1 billion) it is seeking for the unit, according to the report.

Separately, Credit Suisse AG cut its rating on the shares to neutral, the equivalent of hold, from outperform.

Lower Demand

“The steel sector is being downgraded because of reduced demand due to a lower turnover in Asia,” Arnaud Scarpaci, a fund manager at Agilis Gestion SA in Paris, who helps oversee about 60 million euros, said in a telephone interview.

Deutsche Bank, Germany’s largest lender, fell 1.9 percent to 33.15 euros. A gauge of banking stocks fell the most of the 19 industry groups on the Stoxx Europe 600 Index.

HeidelbergCement AG, the world’s third-largest maker of the building material, fell 1.1 percent to 39.15 euros. A gauge of construction-related companies was among the worst performers on the Stoxx 600.

Lufthansa climbed 3 percent to 12.96 euros as Espirito Santo raised its rating on the stock to buy from neutral.

Deutsche Boerse AG, operator of the Frankfurt stock exchange, rose 1.4 percent to 43.20 euros.

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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