German stocks rose, with the DAX index rebound from last week's decline, as investors speculated that economic recovery will support Europe's crisis of sovereign debt.
Volkswagen led gains in the benchmark DAX index, increased 3.7 percent. Munich Re added 1.5 percent as the world's largest reinsurer, said it would maintain stable dividend payments. Metro AG fell 2 percent, Haniel & Cie GmbH is said to consider reducing its stake in the company.
The DAX rose 0.5 percent to 7,018.6 at the close of 5:30 pm in Frankfurt, last week cut 0.3 percent decline. The measure has advanced 4.9 percent this month as U.S. reports showed builders began work on more homes and manufacturing in the New York region recovered more than expected. The broader index recovered hdaX 0.6 percent today.
"The start of 2011 could be very good and we still have a lot of driving market liquidity," said Michael Koehler, chief strategist at Landesbank Baden-Wuerttemberg in Mainz. "The latest economic data we have, particularly the USA, was generally very good and definitely not going to see a relapse. However, the issue of sovereign debt crisis unresolved."
France risks losing its top AAA grade credit as the debt crisis in Europe caused a wave of sales, which threatens to engulf the highest-rated borrowers in the region, with Belgium also faces a possible cut, the Analysts and investors said.
Christmas retail sales
German retail sales for Christmas this year have exceeded their level in 2009, the German Federation of Retail, said, without providing data. Snow hampered shopping "slightly" to the beginning of the week, known as HDE retail group said in an emailed statement yesterday.
Volkswagen's preferred shares gained 3.7 percent to € 126.25. Chinese sales are up 10 percent to 15 percent in 2011 in line with the broader market, Weiming Soh, chief executive of the company in China, said in an interview in Guangzhou, southern China today. Volkswagen group sales in China rose 38 percent in the first 11 months of 2010 to 1.8 million units compared with the previous year, Soh said in a previous meeting.
Moreover, Audi AG, Volkswagen's luxury brand, the car will probably beat its target for the A1 deliveries next year and may further increase production to meet demand for subcompacts, Peter Schwarzenbauer, head of the unit sales, he said.
Munich Re, E. ON
Munich Re rose 1.5 percent to € 113.3. The company plans to pay at least 5.75 euros per share dividend and adhere to its policy of paying at least a quarter of its profits to shareholders, Boersen-Zeitung, citing an interview with the Chief Financial Officer Joerg Schneider.
E. ON AG, 0.6 percent to € 22.54. Germany's largest utility said it has agreed to sell its gas network in Italy to an Italian group consisting of investment funds F2i SGR SpA and AXA Private Equity. The enterprise value is around 290 million euros (380.7 million U.S. dollars), with E. ON for € 255 000 000 Net cash.
Moreover, the German electricity for delivery next year coal prices rose rose to a maximum of two years, which can make electricity generation more expensive.
Metro, Germany's largest retailer, fell 2.6 percent to € 54.37, the first three-day retreat. Haniel wants big investors adjust their portfolio and make strategic investments in "small pearls" that benefit from global trends, the magazine WirtschaftsWoche CEO Juergen Kluge quoted as saying.
Shareholder Haniel and Schmidt-Ruthenbeck group together own 50.01 percent of Metro, the magazine said. The two could keep control of Metro with a 40 percent WirtschaftsWoche said, quoting an unidentified manager at Metro.
Conergy AG surged 18 percent to 58 cents, the highest price in two months. The solar module manufacturer, said it reached an agreement with creditors to reduce debt by 188 million euros.
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