German Stocks Rise, Led by Adidas, Infineon, Lufthansa, Daimler

By Henrietta Rumberger and Stefanie Haxel

Aug. 5 (Bloomberg) -- German stocks gained the most in more than three months as earnings from Adidas AG beat analysts' estimates and Deutsche Bank AG recommended buying shares of Infineon Technologies AG.

Adidas, the world's second-largest sporting-goods maker, rose the most in six months while Infineon had its steepest advance in more than two weeks. Deutsche Lufthansa AG and Daimler AG climbed as crude oil dropped to a three-month low. Deutsche Bank led financial shares higher after better-than-projected earnings from Societe Generale SA.

The benchmark DAX Index jumped 142.51, or 2.2 percent, to 6,492.32 as of 1:44 p.m. in Frankfurt, the steepest gain since April 18. DAX futures expiring in September added 2.4 percent to 6,528.5. The HDAX Index of the country's 110 biggest companies rose 2 percent to 3,289.76.

``Adidas and Societe Generale are the driving forces for the German market today,'' Thorsten Winkelmann, a Frankfurt-based portfolio manager at Allianz Global Investors, which oversees $464 billion in Germany, said in a Bloomberg Television interview. ``Banking stocks are very sensitive to positive surprises within the sector.''

Adidas advanced 2.68 euros, or 7 percent, to 41.05. The sporting-goods maker said second-quarter profit rose 12 percent to 116 million euros ($180 million), beating the 113 million-euro average estimate of five analysts compiled by Bloomberg. Adidas said the annual gross margin will exceed 48 percent, more than its previous forecast of 47.5 percent to 48 percent.

Infineon, Banks

Infineon rallied 29 cents, or 5.8 percent, to 5.31 euros after Deutsche Bank rated the stock ``buy'' in new coverage.

``We see margins and profitability recover over the next 12 months,'' Kai Korschelt, a London-based analyst at the brokerage, wrote in a report dated Aug. 4. He set his share-price estimate at 7 euros.

Deutsche Bank, Germany's largest bank, gained 2.70 euros, or 4.7 percent, to 60.53. Commerzbank AG, the second-biggest, added 90 cents, or 4.3 percent, to 21.82 euros. Hypo Real Estate Holding AG, the country's second-largest commercial-property lender, increased 34 cents, or 1.9 percent, to 18.36 euros.

Societe Generale, France's second-biggest bank, said profit fell 63 percent in the second quarter, less than analysts estimated, on writedowns linked to the subprime contagion.

The Dow Jones Europe Stoxx Banks Index, a benchmark for the industry, rallied as much as 4.3 percent.

Crude Oil

Lufthansa, Europe's second-largest airline, increased 71 cents, or 4.9 percent, to 15.25 euros. Air Berlin Plc, the region's third-biggest discount airline, climbed 19 cents, or 5.4 percent, to 3.68 euros.

Crude oil fell to $118 a barrel in New York, the lowest since May 5, on speculation Tropical Storm Edouard won't damage U.S. Gulf facilities and as concern economic growth will slow prompted investors to sell commodities.

Daimler, the world's second-largest luxury automaker, advanced 1.94 euros, or 5.2 percent, to 38.91. Cevian Capital AB, the Swedish investor, is accumulating shares in the carmaker, Sueddeutsche Zeitung reported, citing an unidentified hedge fund manager.

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

Adva AG Optical Networking (ADV GY) jumped the most in more than two weeks, climbing 9 cents, or 5.4 percent, to 1.75 euros. The maker of networking equipment for customers such as Deutsche Telekom AG reported a second-quarter loss that was less than anticipated by Adva.

Allianz SE (ALV GY), Europe's largest insurer, gained 4.27 euros, or 3.9 percent, to 112.99. China Development Bank is competing with Commerzbank AG to buy the insurer's Dresdner Bank, Germany's third-largest lender by assets, three people familiar with the matter said.

Beiersdorf AG (BEI GY) lost 2.50 euros, or 6.1 percent, to 38.68, the biggest decline in almost four years. The maker of Nivea skin creams reported slowing sales growth and said its operating margin narrowed in the second quarter.

Deutsche Boerse AG (DB1 GY) rose 2.51 euros, or 3.8 percent, to 69.25, the steepest increase in more than two weeks. Europe's biggest exchange by market value said it may start an internal electronic trade-matching system known as a dark pool to brace for competition. So-called dark pools, which match orders anonymously, are becoming increasingly popular as investors seek to disguise their strategies.

Freenet AG (FNT GY) tumbled 50 cents, or 4.3 percent, to 11.06 euros. The mobile-phone and Internet operator that agreed to buy rival Debitel AG said pretax profit plummeted 95 percent in the first two months of the second quarter and there will be further writedowns.

Heidelberger Druckmaschinen AG (HDD GY) advanced 47 cents, or 4.1 percent, to 11.97 euros, the biggest gain in almost a week. The world's largest maker of printing machines posted a lower-than-estimated net loss for the fiscal first quarter.

K+S AG (SDF GY) plunged for a third day, losing 4.56 euros, or 6.3 percent, to 67.79. Europe's largest producer of potash used in fertilizers fell amid concern declining crop prices may curb demand for pesticide and fertilizer. Switzerland's Syngenta AG, the world's biggest maker of agricultural chemicals, and Israel Chemicals Ltd. also declined.

KUKA AG (IWK GY) fell 28 cents, or 1.9 percent, to 14.72 euros, the lowest in 11 months. The company that makes robots that manufacture bodies for Chrysler LLC's Jeep Wrangler said second-quarter profit slumped 89 percent following a one-time gain from the sale of a unit in the year-earlier period.

Pfleiderer AG (PFD4 GY) added 71 cents, or 8.8 percent, to 8.75 euros, the steepest increase since March 20. The flooring maker with 22 factories on two continents bought a chipboard factory in North Carolina and decided to move some production capacity from its facility in La Baie, Canada, Boersen-Zeitung reported, citing Chief Executive Officer Hans Overdiek.

Roth & Rau AG (R8R GY) jumped 2.43 euros, or 8.4 percent, to 31.48, the highest in two weeks. The world's largest maker of equipment used to coat solar panels said first-half profit almost doubled and raised its full-year sales forecast.

Technotrans AG (TTR GY) tumbled 2.70 euros, or 23 percent, to 9, the lowest in almost five years. The supplier of components to the print industry reported a 45 percent drop in first-half profit to 2.6 million euros and cut its full-year sales forecast.

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