German stocks (DAX) advanced, paring the DAX Index’s second week of declines, on a report that euro-area policy makers have debated dropping private-sector involvement from the region’s permanent bailout mechanism.
Heidelberger Druckmaschinen AG gained as competitor Manroland AG filed for insolvency in Germany’s largest corporate failure in two years. Software AG climbed after Bankhaus Metzler upgraded the stock.
The DAX Index jumped 1.2 percent to 5,492.87 at the close in Frankfurt, paring a weekly drop of 5.3 percent. The gauge has still lost 9.3 percent since Nov. 11 as Italian, Spanish and French bond yields soared, adding to concern the debt crisis is spreading to the euro area’s larger economies. The broader HDAX Index gained 1.1 percent today. Shares fell yesterday after German Chancellor Angela Merkel said she remained opposed to joint euro-area bonds.
“There has been an excess of pessimism recently,” said Arnaud Scarpaci, a fund manager at Agilis Gestion SA in Paris, which oversees about $110 million. “Today we’re seeing a technical rebound with the U.S. market open for a half day and no major statistics expected.”
Euro-area states have considering dropping private-sector involvement from the permanent bailout mechanism as part of wider treaty change discussions, Reuters said, citing European Union officials.
Italy sold 8 billion euros ($11 billion) of six-month Treasury bills, yielding 6.504 percent, almost twice the 3.535 percent at the last auction on Oct. 26. The country’s benchmark 10-year bonds extended their decline after the sale, sending yields higher.
German Debt
German two-year debt rose for the first time in three days as Belgium’s de Tijd newspaper reported European Central Bank Governing Council member Luc Coene as saying the ECB will probably cut interest rates if the current situation continues.
The cost of insuring against default on European financial- company debt rose to a record, according to traders of credit- default swaps.
ECB Executive Board member Jose Manuel Gonzalez-Paramo urged euro-area politicians to take bold steps toward fiscal union to end the debt crisis, and said they should not rely on the central bank.
“Governments cannot expect the ECB to finance public deficits,” Gonzalez-Paramo said in a speech in Oxford, England, yesterday. “It is now a time for politicians to be bold and courageous” and “complete as soon as possible the great project begun 60 years ago towards ever closer union,” he said.
Heidelberger Druckmaschinen
Heidelberger Druckmaschinen surged 12 percent to 1.45 euros. Manroland filed to open insolvency proceedings with the district court in Augsburg, Germany, court spokesman Alfred Schwarz said. Werner Schneider was appointed as insolvency administrator, said the Offenbach-based company, which employs 6,500 workers worldwide, mainly in Germany.
Software AG climbed 5.7 percent to 29 euros after Bankhaus Metzler upgraded the stock to “buy” from “sell.”
BASF SE (BAS) advanced 1.7 percent to 47.24 euros. The company will invest 1.3 billion reais ($688 million) in building a plant in the metropolitan region of the Brazilian city of Salvador, Folha de S. Paulo reported via its online news service yesterday, citing Stefan Marcinowski, a company executive.
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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