BLBG:German Stocks Advance For Fourth Day On Euro Optimism
German stocks advanced for a fourth day amid optimism the European Central Bank will win support from policy makers to ease the euro area’s debt crisis.
Siemens AG (SIE) rose 1 percent after a report said ThyssenKrupp AG, Germany’s largest steelmaker, will not merge with the company. Infineon Technologies AG (IFX), Europe’s second-largest semiconductor maker, retreated 0.8 percent after Jefferies Group Inc. downgraded the stock.
The DAX Index (DAX) climbed 0.6 percent to 6,726.24 at 10:10 a.m. in Frankfurt. The measure has increased percent 13 percent from its 2012 low on June 5 as euro-area leaders eased repayment terms for Spanish lenders and central banks took measures to support growth. The broader HDAX Index gained 0.5 percent today.
“This time the markets think the ECB might implement the measures they have been talking about, co-ordinated action between the ECB and euro-bailout mechanisms,” said Ion-Marc Valahu, co-founder and fund manager at Clairinvest in Geneva. “We have an optimistic rally going into Thursday’s ECB meeting, which will be critical.”
ECB President Mario Draghi, who sparked a global market rally last week by pledging to do whatever it takes to preserve the euro, is trying to build consensus among governments and central bankers for a plan to ease borrowing costs in Spain and Italy before ECB policy makers convene on Aug. 2.
Draghi will meet U.S. Treasury Secretary Timothy Geithner in Frankfurt today and will also seek the support of Bundesbank President Jens Weidmann, a critic of ECB bond purchases.
Siemens, ThyssenKrupp
Siemens, Europe’s largest engineering company, gained 1 percent percent to 67.58 euros, for the biggest contribution to the increase in the DAX Index. ThyssenKrupp won’t merge with Siemens, Sueddeutsche Zeitung cited Gerhard Cromme, the chairman of both companies, as saying.
German media, including the WirtschaftsWoche magazine, had reported last week that ThyssenKrupp may seek a merger with Siemens in the long term as the German steel manufacturer may not be able to survive on its own.
Deutsche Boerse AG (DB1), the operator of the Frankfurt stock exchange, rose 1.3 percent to 40.79 euros.
Infineon Technologies dropped 0.8 percent to 5.47 euros after Jefferies cut the stock to hold from buy.
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
