German Stocks Rise, Led by Banks; Deutsche Boerse, Adidas Gain

By Stefanie Haxel

Nov. 24 (Bloomberg) -- German stocks gained after Hypo Real Estate Holding AG received a 20 billion-euro ($25 billion) debt guarantee from the government, boosting investor confidence.

Hypo Real Estate, the property lender bailed-out last month, rallied 12 percent. Deutsche Bank AG and Commerzbank AG also rose. Deutsche Boerse AG advanced 6.5 percent after buying back shares. ThyssenKrupp AG gained 7.4 percent after the Financial Times Deutschland said Germany’s largest steelmaker plans to cut about 1 billion euros in costs.

Germany’s DAX gained 145.75, or 3.5 percent, to 4,273.16 as of 10:54 a.m. in Frankfurt. DAX futures expiring next month rose 4.9 percent. The broader HDAX Index added 3.4 percent.

“It’s liquidity given to the banks,” Michael Scholz, an equity strategist at WestLB in Frankfurt, said in a Bloomberg Television Interview. “Negative sentiment retained over a period of one year won’t be corrected within two days. It’s psychology at the moment but if that psychology triggers a positive momentum that’s O.K.”

Hypo Real Estate gained 25 cents, or 12 percent, to 2.40 euros. The lender received a 20 billion-euro debt guarantee from the German government’s rescue fund. Citigroup Inc., which two years ago was the biggest U.S. bank by market value, will have $306 billion of troubled mortgages and toxic assets guaranteed by the U.S. government and will receive a cash infusion from the Treasury Department’s $700 billion Troubled Asset Relief Program.

Deutsche Bank, the country’s largest bank, rose 1.195 euros, or 6.4 percent to 19.995 euros. Commerzbank, the second-biggest, advanced 43 cents, or 7.9 percent, to 5.875 euros.

The DAX Index is down 48 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 $965 billion in the worst financial crisis since the Great Depression. Business confidence in Germany, Europe’s largest economy, slumped to the lowest level in almost 16 years in November as the global crisis sapped demand for exports.

Deutsche Boerse advanced 3.10 euros, or 6.5 percent, to 50.60. Europe’s largest exchange by market value said it bought back more than 450,000 of its own shares from Nov. 17 to Nov. 21.

ThyssenKrupp climbed 91 cents, or 7.4 percent, to 13.27 euros. The steelmaker’s cost cutting measures are in response to expected declines in new orders in several divisions, particularly the car-parts supply and steel businesses, the newspaper reported.

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

Adidas AG (ADS GY) increased 1.07 euros, or 5 percent, to 22.55 euros, snapping a five-day retreat. The world’s second- largest sporting-goods maker agreed to become the sole sponsor of the International Association of Athletics Federations’ World Athletics Series until 2019.

Bayerische Motoren Werke AG (BMW GY) gained 76.5 cents, or 4.3 percent, to 18.705 euros. The world’s largest luxury carmaker expects to increase its market share in Germany to a record this year, Auto Motor und Sport reported yesterday, citing the company’s German chief, Philipp von Sahr.

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