German Stocks Drop; Siemens, BMW Decline on Economic Concern

By Alexis Xydias

Oct. 8 (Bloomberg) -- German stocks fell for a third day as concerted action from central banks worldwide to stem the effects of the credit crisis failed to ease concern the broader economy will falter.

Siemens AG, Europe's largest engineering company, and Bayerische Motoren Werke AG, the world's largest maker of luxury cars, led losses among companies sensitive to economic growth.

The benchmark DAX Index slid 2.2 percent to 5,212.36 at 2:33 p.m. in Frankfurt, after earlier slumping as much as 8.6 percent below the 5,000 mark for the first time in three years. Stocks pared losses after the Federal Reserve, European Central Bank and four other central banks cut interest rates. The HDAX Index of the country's 110 biggest companies fell 2.6 percent.

``The cuts are very good news and will help in the longer term, but right now we don't have ears for good news,'' said Sergi Martin, who oversees $9 billion as chief executive officer at Credit Andorra's Credit Invest asset management unit in Andorra La Vella, Andorra. ``There is a lot of panic and the type of problems we face are not solved in one day or by one action. It's too soon to be positive on the market.''

The DAX has slumped 36 percent this year as a financial crisis sparked by U.S. subprime-mortgage defaults damaged the solvency of banks, blocking money markets and pushing the global economy toward a recession.

BMW, Continental

Siemens fell 2.2 percent to 53.33 euros. The stock was downgraded to ``sell'' from ``hold'' at ING Groep NV, which said the company may trail current earnings estimates and disappoint on cost-savings targets.

BMW slid 1.8 percent to 24.11 euros. The company said car deliveries slumped 15 percent last month as the credit crunch discouraged consumers from making large purchases.

Shares of Continental AG that were tendered in Schaeffler Group's takeover offer gained 9.3 percent to 59 euros after the family owned ball-bearing maker said it plans to file for European Union antitrust approval next week. Non-tendered shares in Continental, Europe's second-biggest car-parts maker, declined 6.5 percent to 43.50 euros.

The following stocks also rose or fell in the German market. Stock symbols are in parentheses:

Deutsche Bank AG (DBK GY) fell 1.77 euros, or 4.1 percent, to 41.81 euros. Germany's biggest bank said the outlook for the banking industry ``remains difficult'' as market turmoil continues.

Freenet AG (FNT GY), the German mobile-phone and Internet operator that agreed to buy competitor Debitel AG, slid 6.8 percent to 4.96 euros. Goldman Sachs Group Inc. cut its share- price estimate for the company 27 percent to 13.20 euros.

Q-Cells AG (QCE GY), the world's largest solar-cell maker, dropped 4.2 percent to 38.35 euros. Nordex AG (NDX1 GY), a German windmill maker, slid 6.5 percent to 13.70 euros.

German renewable energy stocks fell on concern the companies will have to cut prices to attract clients as the global credit crisis reduces funding for solar parks and wind farms. Piper Jaffray & Co. analyst Torben Sommer cut his recommendation on Q- Cells to ``neutral'' from ``buy,'' citing negative effects of the credit-market turmoil.

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net.