German Stocks Fall for Second Day; Steelmakers, Infineon Drop

By Adria Cimino

Sept. 24 (Bloomberg) -- German stocks fell for a second day amid speculation a six-month rally in equities has outpaced the outlook for economic growth and corporate earnings.

Salzgitter AG and ThyssenKrupp AG, Germany’s biggest steelmakers, dropped at least 1.5 percent as metals declined. Infineon Technologies AG, Europe’s second-largest semiconductor maker, also retreated.

The benchmark DAX Index lost 1.2 percent to 5,633.16 as of 10:06 a.m. in Frankfurt. The rally since March left the DAX valued at about 48.7 times its companies’ reported earnings as of Sept. 18, the highest level since December 2003, according to weekly data compiled by Bloomberg. The broader HDAX Index fell 1.2 percent today.

German business confidence rose less than economists estimated, while reaching a 12-month high in September. The Ifo institute in Munich said today its business climate index, based on a survey of 7,000 executives, climbed to 91.3 from 90.5 in August. Economists expected a gain to 92, the median of 40 forecasts in a Bloomberg News survey showed.

The Federal Reserve yesterday left its target rate for overnight loans between banks in a record-low range between zero and 0.25 percent, and said it will stay “exceptionally low” for an “extended period.” The central bank changed the wording in the final paragraph of its statement to say it will continue to employ a “wide range of tools” to bolster the economy. In August, it said it would use “all available” tools.

“No move on interest rates from the Fed yesterday left investors worried that the recent recovery is looking a little distorted,” James Hughes, a market analyst at CMC Markets in London, wrote in a note to clients.

Salzgitter retreated 2.1 percent to 69.47 euros, while ThyssenKrupp declined 1.5 percent to 23.87 euros. Copper, lead, nickel and tin all slid on the London Metal Exchange.

Infineon sank 2.3 percent to 3.65 euros, snapping a three- day gain. Siemens AG, Europe’s biggest engineering company, dropped 1.4 percent to 65.12 euros.

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

Fresenius SE (FRE3 GY) climbed 56 cents, or 1.4 percent, to 39.40 euros, set for the highest close in a week. The owner of the world’s largest provider of kidney dialysis had its recommendation raised to “buy” from “neutral” at Goldman Sachs Group Inc.

Interseroh SE (ITS GY) added 48 cents, or 1.1 percent, to 44.96 euros, gaining for a second day this week. Alba AG & Co. KG is considering a domination agreement with Interseroh or the purchase of more shares, Handelsblatt reported, citing an interview with Interseroh Chief Executive Officer and Alba Co- Owner Axel Schweitzer.

Porsche SE (PAH3 GY) added 73 cents, or 1.4 percent, to 51.63 euros, breaking a four-day losing streak. The carmaker’s preferred shares were raised to “buy” from “neutral” at Nomura Holdings Inc.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.