By Julie Cruz
July 27 (Bloomberg) -- German stocks advanced, with the benchmark DAX Index resuming its rally, as consumer confidence rose for a third month on retreating inflation and signs the economy is starting to recover.
The DAX added 0.8 percent to 5,270.37 as of 9:43 a.m. in Frankfurt, recouping a 0.3 percent loss from the previous trading day. The gauge has climbed 15 percent since July 10 after U.S. companies from Goldman Sachs Group Inc. to Johnson & Johnson and Apple Inc. reported better-than-estimated earnings.
GfK AG’s sentiment index for August, based on a survey of about 2,000 people, increased to 3.5 from a revised 3 for July, a 14-month high, the Nuremberg-based market-research company said today. Economists expected the index to hold at the initially reported July reading of 2.9, according to the median of 12 estimates in a Bloomberg News survey.
ThyssenKrupp AG, Germany’s largest steelmaker, added 2.8 percent to 21.05 euros as metal prices rose in London. Smaller competitor Salzgitter AG gained 3.9 percent to 72.06 euros.
Deutsche Bank AG, the country’s biggest bank, rose 2.3 percent to 52.09 euros. Supervisory Board Chairman Clemens Boersig sees no reason to step down after he was implicated by a law firm’s findings on surveillance activities, Frankfurter Allgemeine Zeitung reported, without citing anyone.
Commerzbank AG rallied 1.7 percent to 5.14 euros as Germany’s second-biggest bank said it has sold its Dresdner Bank (Switzerland) unit to Liechtenstein-based LGT Group. Allianz SE, the nation’s largest insurer, added 2.3 percent to 72.05 euros.
Volkswagen, Porsche
Volkswagen AG, Europe’s largest carmaker, tumbled 5.1 percent to 248.21 euros. The company is weighing a share sale of as much as 4 billion euros ($5.68 billion) as part of its plan to buy Porsche SE, the Financial Times reported, citing a person close to the matter.
Separately, Volkswagen may no longer be included in the DAX after it combines with Porsche, Euro am Sonntag reported, citing Christian Stocker, an index strategist at UniCredit Markets & Investment Banking.
Porsche sank 5.6 percent to 48.58 euros, on course for the lowest close in two weeks. The luxury carmaker said its net debt is about 10 billion euros, in response to a report in Focus magazine that it increased to 14 billion euros. Deutsche Bank contacted Porsche Chairman Wolfgang Porsche to discuss the company’s debt levels, Der Spiegel magazine said, citing unidentified bankers.
The following stocks also rose or fell in German markets. Symbols are in parentheses after company names.
Grenkeleasing AG (GLJ GY) lost 1.5 percent to 25.82 euros, extending a 2 percent drop on July 24. The German company that leases computer equipment to small businesses in eight European was cut to “neutral” at Bank of America Corp.
Heidelberger Druckmaschinen AG (HDD GY) climbed 4.8 percent to 4.85 euros after German investor newsletter Platow Brief reported the world’s largest maker of printing presses is holding “intensive” merger talks with competitor Manroland AG, without saying where it got the information.
Hochtief AG (HOT GY) climbed 2.5 percent to 40.80 euros. The German construction company’s Leighton and Turner units have won new orders in Abu Dhabi, Australia and the U.S. valued at more than 640 million euros, the company said today.
QSC AG (QSC GY) rallied 9.2 percent to 1.67 euros after Deutsche Bank AG raised its share-price estimate for the phone and Internet-service provider 50 percent to 1.65 euros.
Solarworld AG (SWV GY) jumped 7.5 percent to 18.72 euros, a third straight advance. Germany’s third-largest solar company said profit after tax in the second quarter rose to 27.9 million euros from 23.8 million euros a year earlier and confirmed its sales outlook for 2009.
To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net.
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