German stocks advanced as Federal Reserve Bank of Chicago President Charles Evans said the U.S. central bank should keep policy accommodative to support the world’s biggest economy.
Fresenius Medical Care AG increased 1.4 percent as Berenberg Bank upgraded its recommendation on the stock. Commerzbank AG (CBK) rose 1.6 percent as a gauge of banking stocks advanced in the Stoxx Europe 600 Index. (SXXP) Volkswagen AG added 0.9 percent after saying deliveries rose 11 percent last year.
The DAX Index (DAX) climbed 0.6 percent to 7,762.10 at 10:27 a.m. in Frankfurt. The measure has gained 2 percent since the start of the year as U.S. politicians agreed on a compromise budget to prevent most scheduled tax increases and delay spending cuts. The broader HDAX Index also rose 0.6 percent today.
“The two industries which could draw the most attention on the trading floor are the banking and automotive sectors,” Roger Peeters, chief executive officer at Close Brothers Seydler Research in Frankfurt, wrote in a note. “The Detroit Motor Show starts today, and with the impressive figures role model Volkswagen has released this morning, a lot of attention for this cyclical industry is likely.”
The U.S. government should put “in place policies that slowly but surely bring the prospects of future revenues into balance with future spending,” Evans said in remarks in Hong Kong today. ”Under this scenario, monetary policy has an important contribution to make.”
Federal Open Market Committee minutes, released Jan. 3 in Washington, showed a split on how long the $85 billion monthly bond-purchase program should last. Participants who provided estimates were “approximately evenly divided” between those who said it would be appropriate to end the purchases in mid- 2013 and those in favor of continuing beyond that time.
Fresenius Medical Care gained 1.4 percent to 48.88 euros as Berenberg Bank raised the stock to buy, saying a recent selloff in the shares has created a good buying opportunity.
Investors have ignored the underlying quality of the Fresenius Medical Care business and the earnings potential, according to Berenberg Bank.
Commerzbank, Germany’s second-biggest lender, rose 1.6 percent to 1.67 euros.
Munich Re, the world’s largest reinsurer, added 1.8 percent to 137.65 euros as Barclays Plc raised its rating on the stock to overweight from equal weight.
Volkswagen, Europe’s largest automaker, gained 0.9 percent to 177.65 euros. Deliveries in 2012 rose 11 percent to 9.07 million vehicles, the Wolfsburg, Germany-based company said in a statement today. With last year’s gains, the maker of VW, Audi and Porsche vehicles has increased annual deliveries 44 percent since 2009.
Last year “was the best sales year ever,” Chief Executive Officer Martin Winterkorn said in the statement.
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