German stocks advanced to their highest level in three weeks after euro-area finance ministers eased the terms of their loans to Greece and approved the next disbursement of financial aid to the country.
Deutsche Bank AG (DBK) and Commerzbank AG (CBK) rose 2.3 percent and 1.7 percent, respectively. A gauge of banking stocks contributed the most to the Stoxx Europe 600 Index’s advance. Fresenius Medical Care AG increased 2.8 percent.
The DAX Index (DAX) gained 0.6 percent to 7,332.33 at the close of trade in Frankfurt, their highest level since Nov. 6. The equity benchmark has rallied 23 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 advanced 0.6 percent today.
“This is a short-term relief because Greece needed some cash,” said Guillermo Hernandez Sampere, head of trading at Fpm Frankfurt Performance Mgmt AG in Frankfurt, who helps manage about 500 million euros ($647 million), in a telephone interview. “The gainers today are the banks. They always win when someone in Europe opens the cash box.”
Euro-area finance ministers cut the rates on loans made under the first bailout of Greece in May 2010. They also suspended interest payments for a decade on lending agreed under the second bailout in October 2011. The ministers outlined a plan for the Mediterranean nation to buy back its debt at distressed rates. They authorized Greece to receive a 34.4 billion-euro loan installment in December.
“This has been a very difficult deal,” Luxembourg’s Prime Minister, Jean-Claude Juncker, told reporters in Brussels after chairing a 13-hour meeting that ended early today. “All initiatives decided upon today will bring Greece’s public debt clearly back on a sustainable path.”
In the U.S., a report showed that house prices climbed at a faster pace in September than they did in August. The S&P/Case- Shiller measure of property prices in 20 cities increased 3 percent, compared with 2 percent the previous month. That matched the median economist estimate in a Bloomberg News survey for prices to rise 3 percent.
Deutsche Bank and Commerzbank, Germany’s two largest lenders, added 2.3 percent to 33.92 euros and 1.7 percent to 1.37 euros, respectively.
Fresenius Medical Care, the world’s biggest provider of kidney dialysis, advanced 2.8 percent to 52.74 euros.
Fresenius SE, Germany’s biggest operator of private hospitals, climbed 2.9 percent to 88.26 euros.
GSW Immobilien AG (GIB), the real estate company formerly owned by Cerberus Capital Management LP, advanced 3.6 percent to 32.13 euros as Morgan Stanley raised the stock to overweight, meaning that investors should buy the shares.
Deutsche Wohnen AG (DWNI), Germany’s largest residential landlord by market value, added 2.3 percent to 14.45 euros after Morgan Stanley also upgraded the the stock to overweight. Both companies have made acquisitions since the summer that have increased their earnings-per-share yields, the Morgan Stanley analysts wrote in a note.
The brokerage forecast that rental growth in key German cities will continue as new households form -- bolstered by new jobs and growing salaries -- at a faster pace than residential building permits are issued.
Nordex SE (NDX1) rose 3.4 percent to 3.08 euros, paring an earlier rally of as much as 6.5 percent, as the wind-turbine maker obtained a second large contract to build a wind farm in South Africa, near Port Elizabeth. Nordex declined to say how much the project was worth.
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