Germany's DAX Declines; Deutsche Bank, Allianz, Metro Retreat

By Henrietta Rumberger

Sept. 3 (Bloomberg) -- German stocks fell for the second time this week on concern losses at financial-services companies will increase and a slowing economy will damp the earnings prospects for steelmakers and retailers.

Deutsche Bank AG, Germany's largest bank, and Allianz SE declined the most in almost two weeks after Ospraie Management LLC said it will close its biggest hedge fund. ThyssenKrupp AG, Germany's largest steelmaker, dropped for a third day, following declines in steel stocks in the U.S. and Asia. Metro AG, Germany's largest retailer, fell the most in a week as European retail sales unexpectedly fell 0.4 percent in July.

The DAX Index slid 56.81, or 0.9 percent, to 6,461.66 as of 12:39 p.m. in Frankfurt. DAX futures expiring in September sank 0.7 percent to 6,473. The HDAX Index of the country's 110 biggest companies lost 0.8 percent.

European consumer spending, company investment and exports declined in the second quarter, dragging the economy into a 0.2 percent contraction and pushing it to the brink of a recession. The DAX has declined 20 percent this year as the global economy cooled and the world's largest banks posted writedowns and credit losses of more than $500 billion.

``The financial market crisis is still weighting on the market and we see now to what extend the subprime crisis actually affects the real economy,'' said Robert Halver, head of research at Baader Bank in Frankfurt.

Household Spending


Investment by companies fell 1.2 percent, the first decline in five years, and household spending dropped 0.2 percent after stagnating in the previous three months, the European Union statistics office in Luxembourg said today. Overall gross domestic product fell 0.2 percent, matching an initial estimate published on Aug. 14.

Deutsche Bank fell 89.5 cents, or 1.5 percent, to 58.92 euros. Ospraie, the investment firm run by Dwight Anderson, will close its flagship hedge fund. The Ospraie Fund fell 26.7 percent in August alone after a ``substantial sell-off'' in a number of its energy, mining and resource equity investments, Anderson, 41, said in a letter to investors yesterday. Jonathan Gasthalter, a spokesman for Ospraie, declined to comment.

Hypo Real Estate Holding AG, Germany's second-biggest commercial-property lender, lost 30 cents, or 1.8 percent, to 16.88 euros and Munich Re, the world's biggest reinsurer, dropped 1.21 euros, or 1.1 percent, to 107.22 euros.

Postbank, Thyssenkrupp

Allianz dropped 1.28 euros, or 1.1 percent, to 114.86. Europe's biggest insurer may take writedowns of about 1.2 billion euros ($1.74 billion) after the sale of its Dresdner Bank division to Commerzbank AG, Frankfurter Allgemeine Zeitung reported.

Deutsche Postbank AG retreated 1.53 euros, or 3.5 percent, to 42.34 euros. The sale of Germany's biggest consumer bank by clients is becoming increasingly unlikely, Financial Times Deutschland reported, citing unidentified people close to parent Deutsche Post AG.

ThyssenKrupp lost 41 cents, or 1.3 percent, to 32.13 euros. Kloeckner & Co. SE, a German steel trader, decreased 78 cents, or 3 percent, to 25.59 euros. Nippon Steel Corp., the world's second-largest steelmaker, and U.S. steelmakers including Nucor Corp., the largest U.S.-based producer, declined after ArcelorMittal said it will cut South African steel prices, raising concern prices will drop in Asia.

``ArcelorMittal's announcement yesterday was a blow to the steel industry,'' Wolfgang Matejka, who oversees about $3 billion as chief investment officer at Vienna-based Meinl Bank AG, said in a Bloomberg Television Interview today.

Metro retreated 77 cents, or 1.9 percent, to 39.25 euros and Arcandor AG, Germany's largest department-store operator, lost 8 cents, or 1.4 percent, to 5.50 euros as retail sales unexpectedly fell in July.

Retail shares posted the biggest loss in the pan-European Dow Jones Stoxx 600 Index, with the retail index, a benchmark for the industry, sliding 2.5 percent.

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

Carl Zeiss Meditec AG (AFX GY) fell for the second time this week, declining 39 cents, or 3.2 percent, to 11.71 euros. CA Cheuvreux lowered its recommendation on the shares to ``underperform'' from ``outperform.''

IVG Immobilien AG (IVG GY) lost 46 cents, or 4.1 percent, to 10.89 euros, the lowest since November 2004. Germany's largest commercial-property company plans to expand its remaining oil and gas storage caverns, Frankfurter Allgemeine Zeitung said.

Commerzbank AG lowered it share-price projection for the company to 18 euros from 20 euros, while Equinet AG lowered its price estimate to 21.5 euros from 23 euros.

MTU Aero Engines Holding AG (MTX GY) climbed 35 cents, or 1.4 percent, to 25.55, the highest in three months. Equinet raised its share-price estimate for the largest independent provider of jet-engine maintenance to 30 euros from 28.5 euros.

Norddeutsche Affinerie AG (NDA GY) added 82 cents, or 2.7 percent, to 30.85 euros, the first gain in four days. NordLB raised its price projection on shares of Europe's largest copper refiner 6.7 percent to 32 euros.

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