DAX Index Falls on Orders Report; Commerzbank, Volkswagen Drop

By Henrietta Rumberger

Aug. 6 (Bloomberg) -- Germany's benchmark DAX Index declined as German factory orders unexpectedly fell for a seventh month in June, increasing the likelihood Europe's largest economy contracted in the second quarter.

Volkswagen AG, Europe's largest carmaker, dropped for a second day this week and MAN AG posted its biggest loss in four days. Commerzbank AG fell the most in more than a week on concern Germany's second-largest bank may face further charges. Deutsche Boerse AG led rising shares after analysts advised investors to buy shares in the company.

The benchmark DAX Index decreased 20.16, or 0.3 percent, to 6,498.54 as of 1:26 p.m. in Frankfurt. DAX futures expiring in September sank 15, or 0.2 percent, to 6,536.5. The HDAX Index of the country's 110 biggest companies fell 0.2 percent to 3,297.35.

``The latest data made the speed of the global economic slowdown more visible,'' said Folker Hellmeyer, chief analyst at Bremer Landesbank Kreditanstalt. ``The global picture starts to get under pressure.''

Factory orders, adjusted for seasonal swings and inflation, declined 2.9 percent from May, the Economy Ministry in Berlin said today, the biggest drop since July 2007. Economists expected a gain of 0.4 percent, the median of 39 forecasts in a Bloomberg News survey.

Volkswagen slipped 4.01 euros, or 2 percent, to 194.29. MAN, Europe's third-largest truckmaker, dropped 76 cents, or 1.2 percent, to 64.49 euros.

Commerzbank, Deutsche Boerse

Commerzbank fell 84 cents, or 3.8 percent, to 21.11 euros after rising as much as 2.5 percent earlier. The bank said today profit in the second quarter rose 6.4 percent as a tax gain and higher revenue from lending offset debt-related writedowns.

``There's concern the bank may face further charges from its large commercial-real estate exposure,'' said Ronny Rehn, a London-based analyst at Morgan Stanley. Commerzbank has a commercial real-state book of 83 billion euros.

Deutsche Boerse rallied 2.23 euros, or 3.2 percent, to 72.54, the biggest jump in almost three weeks. Goldman Sachs Group Inc. rated the operator of the Frankfurt exchange ``buy'' in new coverage.

``The group's superior diversification and relatively high exposure to derivative products leaves it well placed for growth in a more moderate volume environment,'' Goldman analyst Chris M. Turner in London wrote in a note to investors today. ``Deutsche Boerse's relatively low exposure to cash equities means the group should be best placed to withstand the threats of liquidity fragmentation and sustained pricing pressure.''

E.ON, RWE

E.ON AG, Germany's biggest utility, fell 88 cents, or 2.2 percent, to 39.62 euros. RWE AG, the second-largest utility, slipped 1.71 euros, or 2.2 percent, to 74.57 euros.

German electricity for tomorrow fell to the lowest weekday price for 10 weeks as wind capacity may be above average and nuclear capacity was boosted by the return of two plants at the weekend. Day-ahead power in Europe's biggest electricity market fell 1.6 euros, or 2.3 percent, to 62.50 euros a megawatt- hour as of 1:49 p.m. in Frankfurt, according to broker ICAP Plc.

The following stocks also rose or fell in German markets. Symbols are in parentheses.

Air Berlin Plc (AB1 GY) climbed 19 cents, or 5.1 percent, to 3.91 euros, the fourth straight gain. Europe's third-biggest discount airline said the load factor, or proportion of seats filled, declined 0.3 percentage point to 83.3 percent as the airline scaled back capacity by 1.1 percent. Passenger numbers fell 1.4 percent in July as the company scaled back flights.

Colonia Real Estate AG (KBU GR) increased for a second day, adding 27 cents, or 3.6 percent, to 7.77 euros. HSBC Holdings Plc initiated coverage of shares of the property company with an ``overweight'' recommendation and a price estimate of 8.50 euros.

Deutsche Post AG (DPW GY) climbed 21.5 cents, or 1.4 percent, to 15.62 euros. Citigroup Inc. raised its recommendation on shares of Europe's biggest postal service to ``buy'' from ``hold.''

Freenet AG (FNT GY) advanced 14 cents, or 1.3 percent, to 11.11 euros, the second gain this week. Vodafone Group Plc is considered the favorite to buy the digital-subscriber-line business of the mobile-phone and Internet company, Platow Brief reported, without citing anyone.

Fuchs Petrolub AG (FPE GY) fell for a second day, dropping 2.29 euros, or 4 percent, to 55.17. Germany's largest maker of lubricants said second-quarter profit gained 5.5 percent to 32.8 million euros on rising demand from Asia and Europe. Analysts surveyed by Bloomberg had predicted quarterly net income of 33 million.

Henkel AG & Co. KGaA (HEN3 GY) rose 97 cents, or 3.7 percent, to 27.16 euros, the highest since June 19. The German maker of Persil detergent, said second-quarter operating profit in the quarter fell to 113 million euros from 339 million euros. Adjusted for one-time costs, earnings on that basis rose 7.8 percent, according to the statement.

``Adjusted operating profit is above expectations, that's why the shares rise,'' Martina Noss, an analyst at Norddeutsche Landesbank in Hanover, Germany, said in an interview. She has a ``hold'' rating on the stock.

Loewe AG (LOE GY) gained for a seventh straight day, adding 76 cents, or 6.3 percent, to 12.75 euros. The television maker partly owned by Sharp Corp. said second-quarter profit more than tripled to 5.4 million euros on higher demand during the European soccer championship.

To contact the reporter on this story: Henrietta Rumberger in Frankfurt at hrumberger@bloomberg.net.