German shares close at six-year high, but SAP losses limit gains UPDATE

German shares close at six-year high, but SAP losses limit gains UPDATE

	Published : Fri, 12 Jan 2007 19:05 By : Agencies Print this Story

(Updating with full report)

FRANKFURT (AFX) - Share prices closed at their highest level in nearly six years as Wall Street rallied from opening declines, though gains were limited by heavy losses in shares of business software giant SAP.

At the close, the DAX 30 index was up 17.87 points or 0.27 pct at 6,705.17, its highest level since Feb 2001.

The MDAX climbed 32.21 points or 0.34 pct to 9,523.74, while the TecDAX was up 0.26 points or 0.03 pct at 771.36.

The DAX futures contract was up 31.50 points or 0.47 pct at 6,751.00, while bund futures were down 0.29 points or 0.25 pct at 115.21.

The euro last traded at 1.2927 usd, against 1.2926 in midafternoon London trade.

On the DAX, SAP shares slumped 3.27 eur or 7.74 pct to 39.00, after the business software firm last night released disappointing software sales.

SAP said software sales in the fourth quarter grew 7 pct to around 1.26 bln eur, but added there was zero growth in the Americas and just 2 pct growth in the Asia-Pacific region.

The figure fell short of a consensus forecast of analysts polled by dpa-AFX News, which had predicted sales of around 1.344 bln eur.

The business software maker also warned it would not meet its 2006 software license sales goals because of a slowdown in the key US and Asia markets.

Sentiment was further dampened when Goldman Sachs took SAP shares off its Conviction Buy list, assigned them a 'neutral' rating instead and slashed the target price to 39 eur from 49.

TUI was also weaker, losing 0.18 eur to 15.67, after the tourism and shipping firm last night denied market rumours that Volkswagen's outgoing brand head Wolfgang Bernhard plans to join the Hanover-based company.

Hypo Real Estate slipped 0.12 eur to 51.20 after WestLB downgraded the firm's shares to 'add' from 'buy'.

In comment published today, the German broker pointed out that with Hypo Real Estate's share price having exceeded the 50 eur level, the remaining potential to its unchanged 56 eur target price has shrunk to about 10 pct and is not sufficient for maintaining its 'buy' rating.

Among the gainers, Bayer jumped 1.24 eur or 2.96 pct to 43.20, making it the best large-cap performer.

Earlier, a source told AFX News that an end to the dispute between Bayer and Novartis AG regarding multiple sclerosis drug Betaseron could be in sight.

A law suit filed by Schering - acquired by Bayer last year and now called

Bayer Schering Pharma AG - is likely to be postponed to begin Feb 20 from Jan 16, said the source.

The Financial Times Deutschland cited a letter written by Bayer and Novartis requesting the postponement 'in order to enable an agreement between the two parties'.

Metro was up 0.41 eur at 50.83 after UBS raised its target price on the retailer to 60 eur from 57.

Utilities were also in the black after German economy minister Michael Glos told the Financial Times in an interview that the government is open to 'any option' on liberalising energy, including the unbundling of producers from their distribution networks.

E.ON added 0.92 eur to 100.67, while RWE rose 0.27 eur to 82.27.

Over on the MDAX, K+S rose 2.56 eur or 3.40 pct to 77.90, while IVG Immobilien lost 1.35 eur or 3.78 pct to 34.37 after HSH Nordbank said it is cutting its stake in IVG to around 2.5 pct from current 5.1 pct.

On the TecDax, Conergy plummeted 4.06 eur or 8.34 pct to 44.63 after issuing a profit warning. Qiagen rose 0.63 eur or 5.25 pct to 12.62.

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