Bloomberg News

German Stocks Fall, Snapping Two-Day Gain; K+S Declines

April 12, 2013

German stocks declined, snapping a two-day rally, after Cyprus was said to seek an increase in its bailout funds as euro-area finance ministers met in Dublin, and a report showed U.S. retail sales unexpectedly fell in March.

K+S AG (SDF) lost the most in five months after Deutsche Bank AG (DBK) recommended selling Europe’s largest potash maker. Deutsche Bank and Commerzbank AG (CBK) retreated at least 2.8 percent, following a gauge of European lenders lower. Volkswagen AG (VOW) fell to its lowest price in more than five months after saying global sales growth slowed in March.

The DAX Index (DAX) retreated 1.6 percent to 7,744.77 at the close of trading in Frankfurt, paring its weekly gain to 1.1 percent. The broader HDAX Index slipped 1.5 percent today. The volume of shares changing hands in companies on the DAX was 17 percent lower than the average of the last 30 days, data compiled by Bloomberg showed.

“Generally there is a sense that the U.S. market can’t continue pushing upwards for an indefinite period so people in Europe are getting more cautious,” Raimund Saxinger, a fund manager at Frankfurt-Trust Investment GmbH, which oversees about $22 billion, said in a telephone interview. “The economy in Europe is still weak so there is not a fundamental reason why there should be a push higher.”

German stocks extended their decline after Cyprus was said to seek an increase in the 10 billion euros ($13 billion) in aid pledged by the euro area. President Cyprus Nicos Anastasiades will also seek more for Cyprus from the European Union structural funds, according to a government official, who asked not to be identified.

European Funds

Cyprus government spokesman Christos Stylianides said afterwards that Anastasiades hasn’t requested additional financial assistance. “What the President of the Republic is discussing with European officials is the possibility of increasing European funds, for growth and social cohesion,” he said in an e-mailed statement from Nicosia.

Germany said extra aid is not on the agenda for rescuing the island nation.

Separately, euro-area finance ministers met in Dublin where they reviewed support to Cyprus. Dutch Finance Minister Jeroen Dijsselbloem said the size of the program won’t change and Cyprus will be able to fill other funding gaps as it restructures its two largest banks.

Retail sales in the U.S. fell in March by the most in nine months as employment slowed. The 0.4 percent decrease, the biggest since June, followed a 1 percent gain in February, Commerce Department figures showed today in Washington. The median forecast of 85 economists surveyed by Bloomberg called for an unchanged reading in March.

K+S Downgraded

K+S slid 3.9 percent to 34.28 euros after Deutsche Bank cut the stock to sell from hold, citing poor medium-term earnings per share and cashflow prospects, and saying it expects potash pricing to remain under pressure.

Deutsche Bank and Commerzbank, Germany’s biggest lenders, dropped 3.6 percent to 31.30 euros, and 2.8 percent to 1.17 euros, respectively. A gauge of European banks posted the third- worst performance of the 19 industry groups in the Stoxx Europe 600 Index.

Volkswagen fell 3.3 percent to 147.80 euros. Europe’s biggest automaker said deliveries rose 0.2 percent last month as demand in China and North America more than offset shrinking sales across Europe. The Wolfsburg, Germany-based carmaker also said that headwinds in its home region are intensifying.

“The data for March clearly show that the markets are becoming even more difficult,” Christian Klingler, VW’s sales chief, said in a statement.

Bayerische Motoren Werke AG (BMW), the largest maker of luxury cars, slipped 2.4 percent to 67.40 euros, while Daimler AG (DAI), the third-biggest, lost 2.8 percent to 40.12 euros.

A gauge of European auto-related stocks fell 2.8 percent, for the biggest decline on the Stoxx 600.

Duerr AG (DUE) gained 3.9 percent to 87.40 euros after UBS AG initiated coverage of the German maker of painting plants for the automobile industry with a buy rating, citing the shares’ further potential for outperformance.

To contact the reporter on this story: 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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