By Julie Cruz - Dec 8, 2011 4:00 PM GMT+0700
German stocks (UKX) rose amid speculation the European Central Bank will announce measures to fight off a recession as the region’s leaders meet to lay the foundation for a fiscal union.
Allianz SE (ALV) and Munich Re paced advances in European insurance companies, increasing more than 1 percent. Deutsche Bank AG (DBK) led gains in the benchmark DAX (DAX) Index, climbing 2.1 percent. Centrotherm Photovoltaics AG jumped after Citigroup Inc. recommended buying the stock.
The DAX added 1.1 percent to 6,057.41 at 9:59 a.m. in Frankfurt. The gauge declined yesterday after Chancellor Angela Merkel’s government said it opposes running the euro area’s temporary rescue fund along with its permanent bailout facility. The broader HDAX Index gained 1 percent today.
ECB policy makers meeting in Frankfurt will cut the benchmark interest rate by a quarter percentage point to 1 percent, according to 53 of 58 economists in a Bloomberg News survey. They may also loosen collateral criteria to give banks greater access to cheap cash and offer longer-term loans, said three euro-area officials with knowledge of the deliberations.
Hours later, leaders will convene in Brussels to debate a solution to the region’s debt crisis, for the fifth time in 19 months. The ECB says that governments must address the cause of the turmoil, while it focuses on enabling banks to lend more.
Allianz, Europe’s biggest insurance company, gained 1.3 percent to 80.70 euros, while Munich Re, the world’s largest reinsurer, advanced 1.6 percent to 95.98 euros. A gauge of insurance companies was the best performer among the 19 industry groups in the Stoxx Europe 600 Index today.
Deutsche Bank, Germany’s biggest bank, rose 2.1 percent to 30.13 euros, the first increase in three days.
Centrotherm surged 11 percent to 10.30 euros after Citigroup initiated coverage of the renewable energy company with a “buy” recommendation.
-- With assistance from Gabi Thesing and Jeff Black in Frankfurt. Editors: Srinivasan Sivabalan, Andrew Rummer
To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net
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