German Stocks Advance; Metro, Deutsche Bank, MAN Lead Gains

By Stefanie Haxel

Oct. 30 (Bloomberg) -- German stocks rose after the Federal Reserve cut interest rates to stem the slump in the world's biggest economy, and Deutsche Bank AG and Volkswagen AG earnings fueled speculation profits will weather a slowdown.

Deutsche Bank, Germany's biggest bank by assets, surged the most in 16 years after reporting a surprise profit. Volkswagen AG gained 12 percent after Europe's largest carmaker reiterated 2008 targets and earnings beat a median analyst estimate.

The benchmark DAX Index increased 223.7, or 4.7 percent, to 5,032.39 at 11:58 a.m. in Frankfurt. DAX Index futures expiring in December added 4.9 percent. The HDAX Index of the country's 110 biggest companies gained 4.6 percent.

Fed Chairman Ben S. Bernanke yesterday lowered the benchmark interest rate by half a percentage point to 1 percent, in an effort to avert the worst U.S. economic downturn in the postwar era. European Central Bank President Jean-Claude Trichet said Oct. 27 the bank may reduce rates next week.

``That's in any case a reason for joy,'' said Fidel Helmer, head of equity trading at Hauck & Aufhaeuser in Frankfurt, in a Bloomberg Television Interview. ``We have been waiting for those interest-rate cuts for a fairly long time. They are the lubricant of the stock markets.''

Today's gain limits the DAX Index's drop in October to 14 percent. The measure has still slumped almost 40 percent this year on concern bank bailouts in the U.S. and Europe won't prevent a recession as credit-related losses and writedowns reached almost $680 billion in the worst financial crisis since the Great Depression.

Metro, Deutsche Bank

Deutsche Bank gained 3.82 euros, or 15 percent, to 28.62, the steepest increase since at least 1992. Net income in the three months through September dropped to 435 million euros from 1.6 billion euros a year earlier. Analysts had predicted a loss. Rules easing requirements for marking down investments reduced writedowns for the quarter by 845 million euros to 1.2 billion euros, the bank said.

Volkswagen advanced 59.74 euros, or 12 percent, to 576.74. Full-year deliveries and operating profit will beat last year's figures, the carmaker confirmed.

Third-quarter profit gained 27 percent to 1.21 billion euros as sales in China, India and Russia offset weakening markets in the U.S. and western Europe, exceeding the 961 million-euro median estimate of five analysts surveyed by Bloomberg News.

MAN AG, Europe's third-largest truckmaker, climbed for a third day, adding 2.49 euros, or 7.4 percent, to 36.38. Quarterly profit rose 34 percent to 298 million euros on higher commercial- vehicle sales.

Metro AG, Germany's largest retailer, increased 1.80 euros, or 8.2 percent, to 23.80, the highest since Oct. 22. Third- quarter net income was 126 million euros ($166 million), beating the 108 million-euro median estimate of analysts surveyed by Bloomberg News.

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

Aixtron AG (AIXA GY) gained 24 cents, or 7.4 percent, to 3.49 euros. The equipment maker for the chip industry said third- quarter net income climbed 62 percent to 5.5 million euros on demand for gear to produce light-emitting diodes.

HeidelbergCement AG (HEI GY) dropped 2.30 euros, or 3.6 percent, to 61.70. UniCredit Markets & Investment Banking lowered its share-price estimate for Germany's biggest cement maker 13 percent to 70 euros.

Hugo Boss AG (BOS3 GY) sank for the first time in three days, falling 52 cents, or 4.1 percent, to 12.30 euros. Germany's largest clothes maker cut forecasts for this year's sales and profit growth on slumping demand for higher-priced garments.

MorphoSys AG (MOR GY) added 1.58 euros, or 3.4 percent, to 47.49. The biotechnology company working with Novartis AG said third-quarter profit almost doubled payments from its Swiss partner. The company raised its 20 operating profit guidance.

SGL Group AG (SGL GY) added 76 cents, or 4.8 percent, to 16.76 euros. The world's largest maker of carbon and graphite products confirmed five-year growth targets after third-quarter net income climbed 70 percent to 51.3 million euros on demand from steel and aluminum customers.

Vossloh AG (VOS GY) increased 6.85 euros, or 13 percent, to 60.80, the highest in more than a week. The country's biggest supplier of concrete railroad ties raised its full-year forecasts after third-quarter profit jumped fivefold.

To contact the reporters on this story: Stefanie Haxel in Frankfurt at shaxel@bloomberg.net.