It News: German Stocks Decline as Japanese Trade Deficit Widens

German Stocks Decline as Japanese Trade Deficit Widens

By Tom Stoukas on August 22, 2012
Bloomberg News
German stocks declined as Japan reported a wider-than-expected trade deficit and investors waited for meetings of euro-area leaders that may determine whether Greece gets any concessions on the terms of its bailout.

Daimler AG (DAI) led automakers lower, falling 1.2 percent. Commerzbank AG (CBK) lost 1.2 percent after Die Zeit reported the lender may pay costs arising from possible violations of U.S. sanctions. Paragon AG (PGN) advanced 2.8 percent after reporting a 13 percent increase in first-half revenue.

The DAX Index (DAX) dropped 0.8 percent to 7,030.42 at 1:47 p.m. in Frankfurt. The benchmark measure has still rallied 18 percent from this year’s low on June 5 as European Central Bank President Mario Draghi said he would act to preserve the euro. The broader HDAX Index fell 0.9 percent today.

“The recent slow grind higher in stocks is a good reason for profit taking on a morning where Japan’s trade deficit is highlighting European import weakness,” said Daniel Weston, a portfolio adviser at Schroeder Equities GmbH in Munich.

German stocks climbed yesterday to a five-month high as Spain’s borrowing costs fell at an auction of 12-month and 18- month debt.

In Athens, Luxembourg Prime Minister Jean-Claude Juncker, who also heads the group of euro-area finance ministers, visits Greek Prime Minister Antonis Samaras to listen to a request for a two-year extension to the country’s fiscal-adjustment program. French President Francois Hollande and German Chancellor Angela Merkel meet in Berlin tomorrow.

If Samaras shows a willingness to meet the main targets of his country’s second bailout, the other governments in the currency zone may agree to minor concessions, a senior lawmaker with Merkel’s government said yesterday.

Trade Deficit
Japan had a trade deficit of 517.4 billion yen ($6.5 billion) in July as the euro area’s sovereign-debt crisis and a slowdown in China dragged down exports, a report from the country’s Finance Ministry showed. That compared with a 60.3 billion yen surplus in June and a 270 billion yen forecast deficit in a Bloomberg News survey of 28 analysts.

In the U.S., a report today may show that sales of existing properties rose to a 4.51 million annual pace in July from a 4.37 million pace in June, economists predicted. A release tomorrow will show purchases of new houses climbed to a 365,000 rate last month from a 350,000 pace in June, according to the median forecast of economists surveyed by Bloomberg.

A Commerce Department report on Aug. 24 may show that durable-goods orders increased 2.5 percent, the most this year, economists projected.

Carmakers Decline
Daimler, the world’s third-largest maker of luxury cars, slid 1.2 percent to 41.68 euros as a gauge of European automakers retreated. Bayerische Motoren Werke AG, the biggest manufacturer of luxury cars, fell 0.8 percent to 61.16 euros. Continental AG (CON), Europe’s second-largest auto-parts maker, declined 1.6 percent to 81.90 euros.

Commerzbank lost 1.2 percent to 1.27 euros. Germany’s second-biggest lender sees costs from possible violations of U.S. sanctions that may exceed earmarked reserves, Die Zeit reported, citing filings by the German bank.

Hochtief AG, Germany’s largest builder, declined 2.1 percent to 39.61 euros. A gauge of construction and materials companies was the second-worst performer of the 19 industry groups in the Stoxx Europe 600 Index.

Paragon, a German maker of sensors for cars, buildings and industrial machines, advanced 2.8 percent to 8.89 euros, gaining for a fourth day. First-half revenue rose 13 percent to 37.6 million euros ($46.8 million).