German Stocks Snap Two Days of Gains; SAP, BASF Lead Declines

By Stefanie Haxel

Nov. 26 (Bloomberg) -- German stocks declined for the first time in three days as European Central Bank President Jean-Claude Trichet said the euro-area economy may contract in 2009.

SAP AG dropped for a first time this week after Societe Generale SA recommended selling shares of the world’s largest maker of business-management software. BASF SE, the biggest chemical producer, fell 3.8 percent.

Germany’s benchmark DAX Index slipped 47.08, or 1 percent, to 4,513.34 at 1:02 p.m. in Frankfurt, having earlier risen as much as 1.1 percent. DAX futures expiring next month declined 1.6 percent. The broader HDAX Index fell 0.9 percent to 2,244.33.

Trichet said there may be “negative figures” for growth next year, according to an interview with an Egyptian newspaper posted on the ECB Web site today. Europe’s economy slipped into its first recession in 15 years in the third quarter, upping the pressure on lawmakers to reduce the cost of borrowing.

The U.S. recession may have deepened as consumer spending, the biggest part of the economy dropped in October by the most since the 2001 contraction, economists said before a government report today. Faltering demand has caused the Federal Reserve, Treasury and President-elect Barack Obama to ratchet up plans to ease the credit crisis.

“We are seeing the biggest stimulation of the U.S. economy on the one hand and recession concerns on the other,” said Robert Halver, head of research at Baader Bank in Frankfurt.

‘Another Warning’

SAP lost 74 cents, or 2.7 percent, to 26.72 euros. Societe Generale lowered its recommendation to “sell” from “hold,” citing the “risk of another warning” on fourth-quarter license revenue.

BASF fell 96 cents, or 3.8 percent, to 24.23 euros.

Deutsche Telekom AG dropped 12.5 cents, or 1.1 percent, to 10.87 euros. The stock was cut to “underperform” from “market perform” at Sanford C. Bernstein & Co.

Europe’s biggest phone company “is likely to either reduce or disappoint investor expectations for 2009 as the recession impacts their business more seriously and as the U.S. business suffers increasingly at the hands of competition,” Robin Bienenstock, an analyst in London, wrote in a report today. The share-price estimate was cut to 10 euros from 12.50.

E.ON AG lost 1.17 euros, or 4.3 percent, to 26.14. Germany’s biggest utility settled a European Union antitrust investigation by agreeing to sell its extra-high voltage network and divest about 5,000 megawatts of generation capacity.

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