German Stocks Fall a Third Day; ThyssenKrupp, Allianz, BMW Drop

By Julie Cruz

Sept. 2 (Bloomberg) -- German stocks fell for a third day on concern prices have outpaced the prospects for earnings and an economic recovery after a six-month rally pushed the DAX Index to its most expensive level since December 2003.

ThyssenKrupp AG and Salzgitter AG, Germany’s biggest steelmakers, retreated at least 2 percent. Allianz SE followed European insurers lower, declining 1.8 percent. Bayerische Motoren Werke AG and Daimler AG slid more than 2 percent as U.S. car sales dropped.

The benchmark DAX Index decreased 0.7 percent to 5,292.13 as of 11:34 a.m. in Frankfurt, on course for the lowest close in two weeks. A 44 percent rebound since March 6 has left the gauge valued at about 47 times its companies’ earnings, according to weekly Bloomberg data. The broader HDAX Index slipped 0.8 percent today.

ThyssenKrupp and Salzgitter lost 2 percent to 22.36 euros and 3.6 percent to 61.24 euros, respectively, as metal prices dropped in London. The China Iron & Steel Association said the country’s steel production growth will slow for the rest of the year as tightening credit could restrain building expenditure.

Allianz, Europe’s biggest insurer by market value, fell 1.8 percent to 77.17 euros. U.K. life insurers declined in London as the Association of British Insurers said the industry may be forced to raise as much as 70 billion pounds ($113 billion) of fresh capital to comply with new European Union regulations.

BMW dropped 2.6 percent to 30.18 euros after the world’s largest maker of luxury cars said sales at its U.S. unit fell 21.3 percent to 24,343 units in August. Daimler, the second- biggest, tumbled 2.5 percent to 29.88 euros after saying sales for the Mercedes-Benz Cars division in the U.S. declined 10.5 percent to 18,734 units in August.

Lufthansa, Munich Re

Deutsche Lufthansa AG, Europe’s second-biggest airline, retreated 2.4 percent to 10.56 euros. Fraport AG slid 3.4 percent to 33.49 euros. The owner of Frankfurt Airport will postpone construction of a third terminal at the hub as passenger and flight numbers decline, Die Welt reported. Work on the terminal, which was originally to open in 2013, will start in two or three years, the newspaper reported, citing an interview with Fraport Chief Executive Officer Stefan Schulte.

Munich Re climbed 2.4 percent to 104.84 euros after the world’s biggest reinsurer was raised to “outperform” from “neutral” at Credit Suisse Group AG, which cited the insurer’s underperformance and cheapness relative to peers, as well as its “low risk returns.” The analysts kept their 130-euro price estimate for the shares, they wrote in a report today.

Freenet AG slid 4 percent to 8.70 euros, a third straight decline. The German Internet and telecommunication company was cut to “underweight” from “neutral” at HSBC Holdings Plc. HSBC has a target price of 9 euros on the stock.

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