Bloomberg News

German Stocks Climb, Completing Sixth Months of Gains

November 30, 2012

German stocks climbed, with the benchmark DAX Index (DAX) completing its sixth consecutive monthly advance, amid optimism that American politicians will agree on a new federal budget.

HeidelbergCement AG (HEI) climbed 2.3 percent after Morgan Stanley recommended buying the shares of the world’s third- largest cement producer. Lanxess AG (LXS) gained 1.7 percent after UBS AG increased its price estimate for the chemical maker’s shares. ThyssenKrupp AG (TKA) declined 1.6 percent.

The DAX added 0.1 percent to 7,405.5 at the close in Frankfurt, paring a rally of as much as 0.6 percent. The equity benchmark gained 2 percent in November, its sixth consecutive monthly advance and its longest winning streak since February 2011. The broader HDAX Index also increased 0.1 percent today.

“We are marching in solidarity together toward fiscal compromise,” Guy Spier, chief executive officer of Aquamarine Capital Management LLC in Zurich, said in a Bloomberg Television interview today. “They know they will reach a compromise, but if the markets overreact to the public statement, we will get the kind of gyrations we’ve seen.”

The gauge has surged 24 percent from this year’s low on June 5 as the European Central Bank approved a plan to buy the bonds of euro-area members and the Federal Reserve opted for a third round of asset purchases, or quantitative easing.

Budget Negotiations

Congressional Republicans complained that a plan outlined yesterday by Treasury Secretary Tim Geithner merely rehashed old proposals. That set the stage for more contentious negotiations as the end-of-year deadline approaches for politicians to reach a deal or allow more than $600 billion of automatic tax increases and spending cuts to come into force.

President Barack Obama will repeat his call for an extension of George W. Bush-era tax rates for middle-income households when he visits a factory in Hatfield, Pennsylvania, today. He will argue that people will reduce their spending if they do not know whether taxes will rise next year.

A Commerce Department report showed that spending by U.S. consumers unexpectedly dropped and incomes stagnated in October as superstorm Sandy kept some in the Northeast from getting to work or from shopping at malls and car dealerships.

Purchases decreased 0.2 percent, their first decline since May. They gained 0.8 percent in September. The median estimate of 79 economists surveyed by Bloomberg had called for no change in so-called nominal sales. Incomes were unchanged, the Commerce Department said.

HeidelbergCement Rises

HeidelbergCement gained 2.3 percent to 41.79 euros as Morgan Stanley raised the stock to overweight, the equivalent of buy, citing the shares’ recent underperformance and the company’s deleveraging. The brokerage said the stock was its top pick in the European cement sector.

Lanxess advanced 1.7 percent to 66.93 euros after UBS raised its price estimate for the company’s shares by 10 percent to 77 euros. The brokerage said that Lanxess has the ability to continue to increase its prices.

Continental AG (CON) and Daimler AG (DAI) rose 2.6 percent to 85.10 euros and 0.8 percent to 37.98 euros, respectively. A gauge of carmakers posted the best performance of the 19 industry groups in the Stoxx Europe 600 Index (SXXP), gaining 1.1 percent.

ThyssenKrupp lost 1.7 percent to 15.57 euros. Germany’s biggest steelmaker said it dismissed six employees from its GfT Bautechnik unit on suspicion of breach of trust, confirming a Handelsblatt report earlier today.

To contact the reporters on this story: Will Hadfield in London at whadfield@bloomberg.net; Corinne Gretler in Zurich at cgretler1@bloomberg.net

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


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