German shares close higher tracking Wall Street, subprime fears ease UPDATE

German shares close higher tracking Wall Street, subprime fears ease UPDATE

	Published : Thu, 11 Oct 2007 17:09 By : Agencies Print this Story

(Updates with full report)

FRANKFURT (Thomson Financial) - German shares closed higher, tracing a higher opening on Wall Street and positive momentum from a higher close on the Nikkei this morning, as concerns over the US subprime credit market eased.

The DAX closed 47.12 points, or 0.59 pct, higher at 8,033.69, having traded between a low of 7,981.53 and a high of 8,063.83 in today's session.

The MDAX advanced 100.00 points, or 0.94 pct, to 10,756.50, while the TecDAX was up 7.45 points, or 0.74 pct, at 1,013.90.

DAX futures were up 61.00 points, or 0.76 pct, at 8,103.50, while bund futures lost 0.43, or 0.38 pct, to 112.03.

Heino Ruland, trader at FrankfurtFinanz, said easing worries over the long-term fallout from the subprime crisis in the US along with a higher close on the Nikkei index this morning boosted German market.

'The stock market is once again pushing upwards,' said Stefan Soellner, a market expert at Deutsche Postbank. He attributed the strength to indications the US Fed would likely lower rates at its next meeting along with relatively good news surrounding some key German companies.

Leading blue chips higher, Volkswagen jumped 8.33 eur, or 4.75 pct, at 183.57, boosted by speculation that Porsche AG might increase its stake in Germany's largest automaker, perhaps in an effort to take full control of the Wolfsburg-based company.

Traders pointed to the European Court of Justice's ruling on Oct 23 on the so-called 'Volkswagen law' which could do away with the law that bans any single shareholder from holding more than 20 pct of voting rights in the company, effectively protecting it against a takeover.

'There is a lot pointing to the fact that the law will be eliminated and Porsche will raise its stake to around 50 pct,' Analyst Juergen Pieper from Bankhaud Metzler said.

Pieper said, however, that a complete takeover is unlikely and the German state of Lower Saxony would likely want to retain its shares in VW.

ThyssenKrupp followed, rising 1.12 eur or 2.54 pct to 45.24, after it announced it won a 150 mln usd deal to install and maintain the elevators in New York City's Freedom Tower.

Lufthansa added 0.50 eur or 2.36 pct at 21.72, continuing positive momentum from yesterday's strong September passenger data. The airline reported that September showed a 1 pct gain in passenger load factor to 80.1 pct on high demand for air travel in Europe.

Henkel gained 0.80 eur or 2.26 pct to 36.14, while Bayer added 1.25 eur or 2.25 pct to 56.72.

Deutsche Bank was the only banking stock to decline, dropping 0.62 eur or 0.66 pct to 93.38, while peer Hypo Real Estate rose 0.91 eur or 2.07 pct to 44.80 and Commerzbank gained 0.38 eur or 1.26 pct to 30.59.

At the bottom of the index, SAP dropped 0.79 eur or 1.99 pct to 38.94, while Deutsche Boerse fell 1.17 eur or 1.10 pct to 105.57.

Fresenius Medical Care dipped 0.33 eur or 0.90 pct at 36.14 and Adidas lost 0.31 eur or 0.70 pct at 44.21.

On the MDAX, Suedzucker signalled a good start to the third-quarter reporting season in Germany after Europe's largest sugar supplier and processor announced strong results for the second quarter of its 2007-08 fiscal year.

'The figures beat expectations across the board and in addition Suedzucker raised its 2007/08 forecast,' said a local dealer.

'This is all quite positive for the stock. From the chart's technical point of view, the next resistance levels are at 16.20 and 17 eur per share,' he added.

Suedzucker added 0.80 eur, or 5.25 pct, at 16.05, as the top gainer on the index today.

At the other end of the MDAX, Celesio dropped 1.04 eur, or 2.49 pct, at 40.71, making it the worst performer.

Traders said the stock was correcting slightly from gains yesterday after Merrill Lynch raised its stance on the pharmaceutical specialist to 'buy' from 'neutral' and pegged its price target at 47 eur per share largely on valuation grounds.

TecDAX-listed Versatel gained 1.50 eur, or 14.44 pct, at 11.89 as the top performer on the index.

On the other end, Freenet lost 0.70 eur, or 3.52 pct at 19.17 on a media report that a planned takeover of the internet service provider by Drillisch and United Internet has been abandoned because of financing problems.

judith.csaba@thomson.com

jcs/slj/jcs/wj

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