German Stocks Gain for Third Day, Led by Banks; BASF Advances

By Stefanie Haxel

Nov. 3 (Bloomberg) -- German stocks rose for a third day, led by banks, as lower money-market rates fueled speculation the financial crisis will ease.

Deutsche Bank AG climbed 5.5 percent after Chief Executive Officer Josef Ackermann said the country's biggest bank by assets doesn't need to tap the government's rescue fund. Deutsche Postbank AG and Commerzbank AG advanced at least 4 percent. BASF SE gained for a second day as the world's largest chemical maker said its bid for Ciba Holding AG was successful.

The benchmark DAX Index added 51.21, or 1 percent, to 5,039.18 as of 1:02 p.m. in Frankfurt. DAX futures expiring in December declined 0.2 percent. The HDAX Index of the country's 110 biggest companies increased 1.2 percent.

``Investors are happy that we survived the crash month of October,'' said Matthias Jasper, head of equities at WGZ Bank in Dusseldorf. ``The government's help is easing the situation. Commerzbank's acceptance of the rescue package was expected and isn't viewed negatively.''

The DAX retreated 14 percent last month and has slumped 38 percent this year on concern bank bailouts in the U.S. and Europe won't prevent a recession as credit-related losses and writedowns topped $680 billion in the worst financial crisis since the Great Depression.

The decline in money-market rates signals as much as $3 trillion of emergency funds provided by governments to alleviate the credit crisis may be easing interbank lending. The cost of borrowing euros for three months dropped by 3 basis points to 4.73 percent today, the 17th straight decline, the European Banking Federation said.

Borrowing in Dollars

Rates on comparable dollar loans dropped 17 basis points to 2.86 percent, the lowest level since the collapse of Lehman Brothers Holdings Inc. on Sept. 15. It was the 16th consecutive retreat, according to British Bankers' Association data.

Deutsche Bank advanced 1.61 euros, or 5.5 percent, to 31.06.

``From today's perspective we won't take part'' in the 500 billion-euro ($642 billion) rescue package for financial institutions ``because we are strong,'' Chief Ackermann told German broadcaster ZDF.

Postbank, the country's biggest consumer bank by clients in which Deutsche Bank agreed to buy an almost 30 percent stake, added 1.01 euros, or 6.4 percent, to 16.92.

Commerzbank climbed 38 cents, or 4.5 percent, to 8.80 euros. The country's second-largest bank accepted an 8.2 billion-euro capital injection from the government ``to strengthen its capital base.'' The lender had a net loss of 285 million euros in the third quarter after earning 339 million euros a year earlier.

BASF climbed 1.42 euros, or 5.5 percent, to 27.49, the highest since Oct. 14. The chemical maker now holds 70.82 percent of Ciba's share capital and voting rights and will move to delist the Swiss supplier of paper chemicals.

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

Celesio AG (CLS1 GY) dropped 34 cents, or 1.5 percent, to 22.84 euros. Equinet AG lowered its recommendation for the drug wholesaler to ``accumulate'' from ``buy,'' saying ``writedowns on Celesio's Anzag stake and a recession in the U.K. might burden the name.''

Fraport AG (FRA GY) surged 3.48 euros, or 14 percent, to 28.80, the highest in more than two weeks, after a bid by Germany's Social Democrats to form a new state government that may have delayed construction of a new runway faltered.

Separately, the owner of Frankfurt Airport is among bidders shortlisted to buy a stake in China's Yunnan Airport Group and in a new airport, the South China Morning Post reported, citing unidentified people.

IDS Scheer AG (IDS GY) rallied 54 cents, or 11 percent, to 5.44 euros, on course for the biggest gain in more than two weeks. The software company may be sold, Wirtschaftswoche reported, citing an interview with founder and supervisory board chairman August-Wilhelm Scheer. A sale of the company ``wouldn't be an unrealistic development,'' Scheer was quoted as saying.

Munich Re (MUV2 GY) fell for the first time in four days, losing 2.14 euros, or 2.1 percent, to 100.76 WestLB AG cut its share-price estimate for the world's biggest reinsurer 3.9 percent to 122 euros.

Solarworld AG (SWV GY) surged 1.65 euros, or 8.4 percent, to 21.19, the highest in almost three weeks. Frank Asbeck, Chief Executive Officer of Germany's third-largest solar company, said profit and sales will rise next year, boosted by demand at home and in the U.S.

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