DAX Rises First Time in a Week; Deutsche Bank, Daimler Advance

By Julie Cruz

Sept. 4 (Bloomberg) -- German stocks advanced for the first time this week as Goldman Sachs Group Inc. lifted its stance on European banks and strategists increased their year forecasts for European equity indexes.

Deutsche Bank AG and Commerzbank AG, the country’s biggest banks, rose at least 2 percent. Daimler AG and Bayerische Motoren Werke AG added more than 3 percent.

The benchmark DAX Index increased 0.8 percent to 5,343.96 as of 12:13 p.m. in Frankfurt. The gauge has fallen 3.1 percent this week, the biggest decline since June, on concern a six-month rally has outpaced the prospects for earnings and economic growth. The broader HDAX Index gained 0.9 percent.

Goldman Sachs Group Inc. strategists raised their year- end forecast for the Dow Jones Stoxx 600 to 260 from 235, citing upgrades to economic and earnings growth estimates. UBS AG strategist Nick Nelson increased his target for the FTSEurofirst 300 Index to 1,100 from 1,000.

“While we agree that the market tends to make its strongest returns while the economy is still contracting, albeit at a slowing rate, it tends to make further gains as the economy begins to expand,” a team of strategists at Goldman Sachs in London wrote in a report dated yesterday.

Deutsche Bank rose 2 percent to 47.82 euros, while Commerzbank jumped 3.6 percent to 6.90 euros. Goldman Sachs Group Inc. upgraded its recommendation on banks to a “modest overweight” from “neutral.” Goldman said it maintains a “broadly cyclical bias,” preferring shares that are linked to economic growth.

Daimler, BMW, Salzgitter

Daimler AG surged 3.9 percent to 31.46 euros. The world’s second-biggest maker luxury cars doesn’t plan to cut jobs for the moment and will trim costs by more than the 4 billion euros ($5.7 billion) planned for 2009, Bild Zeitung reported, citing an interview with Chief Executive Officer Dieter Zetsche.

BMW, the world’s biggest maker of luxury cars, added 3.2 percent to 31.12 euros. The Dow Jones Stoxx 600 Automobiles & Parts Index rose as much as 3.9 percent today.

Salzgitter AG, Germany’s second-biggest steelmaker, gained 1.2 percent to 63.31 euros as the shares were raised to “buy” from “sell” at Bankhaus B. Metzler seel. Sohn & Co.

Deutsche Telekom AG added 1.9 percent to 9.31 euros. Europe’s biggest telephone company has started talks with Vodafone Group Plc, France Telecom SA and Telefonica SA about selling its T-Mobile U.K. unit, the Financial Times reported, citing people familiar with the situation.

Infineon Technologies AG increased 1.8 percent to 3.66 euros. Europe’s second-largest maker of semiconductors was picked to replace Hannover Re in Germany’s benchmark DAX Index after the stock of Europe’s second-biggest maker of semiconductors rose more than fourfold this year. The changes will take effect on Sept. 21, Deutsche Boerse AG, the operator of the Frankfurt exchange, said in an e-mailed statement yesterday.

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

Celesio AG (CLS1 GY) rallied 4.3 percent to 19.07 euros. Europe’s largest drug wholesaler repeated its outlook for earnings before interest, tax, depreciation and amortization of just over 600 million euros this year. The company commented in a presentation on its Web site today.

Commerzbank AG raised its recommendation for the stock to “hold” from “reduce.”

Kloeckner & Co. SE (KCO GY) slumped 6.1 percent to 16.52 euros, erasing yesterday’s gain. The German steel trader said it plans to raise about 200 million euros ($285 million) by selling new shares.

ProSiebenSat.1 Media AG (PSM GY) surged 5 percent to 7.14 euros, extending yesterday’s 7.3 percent increase. Germany’s biggest private broadcaster sees a slight increase in its viewer market share, beating the market, Chief Executive Officer Thomas Ebeling told Frankfurter Allgemeine Zeitung in an interview.

Puma AG (PUM GY) rose 4 percent to 203.99 euros, the second gain this week. Europe’s second-largest sporting goods maker was raised to “overweight” from “neutral” at HSBC Holdings Plc.

To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net.