German shares close lower after disappointing Bank of America Q3 figures UPDATE

German shares close lower after disappointing Bank of America Q3 figures UPDATE

	Published : Thu, 18 Oct 2007 17:11 By : Agencies Print this Story

(updating with full closing report)

FRANKFURT (Thomson Financial) - German shares closed lower after Bank of America Corp released worse-than-expected third-quarter earnings, fuelling fears that the fallout from the sub-prime credit crisis is not over yet.

The DAX was down 64.01 points or 0.80 pct at 7,921.40 after trading between 7,906.79 and 8,014.56 in today's trade.

The MDAX was down 135.33 points or 1.27 pct at 10,529.08 while the TecDAX lost 15.30 points or 1.51 pct to 1,000.58.

DAX futures were down 75.00 points or 0.94 pct at 7,979.50 while bund futures were up 0.52 or 0.45 pct at 112.62.

The euro was trading at 1.4283 usd compared to also 1.4283 usd in late afternoon London trade.

Leading blue chips lower, SAP lost 1.31 eur, or 3.31 pct, at 38.29, after it released largely disappointing third-quarter results. Traders and analysts said the shares were under pressure for several reasons including unfulfilled expectations that the company would raise full-year guidance, a lack of information about its planned purchase of French peer Business Objects and an anticipated stagnation of sales in the fourth quarter.

Deutsche Post retreated 0.57 eur, or 2.64 pct, at 20.99, on speculation that analysts' expectations for the upcoming third-quarter figures were too optimistic.

Fresenius Medical Care was down 0.45 eur, or 1.24 pct, at 35.84, correcting from gains yesterday after media reports said that the FDA could approve wider use of its PhosLo drug for kidney disease in pre-dialysis treatments.

Thyssenkrupp fell 0.62 eur, or 1.43 pct, at 42.66, for technical trading reasons as the shares have encountered key resistance levels, said traders.

Hypo Real Estate was the bank worst affected by the negative Bank of America numbers, down 0.86 eur, or 1.95 pct, at 43.16 as traders said its shares were already under pressure earlier due to concerns of prolonged fallout from the credit crisis.

Deutsche Bank, dropped 1.09 eur, or 1.19 pct, at 90.15, while Deutsche Postbank lost 0.89 eur, or 1.68 pct, at 52.01.

Bucking the sudden negative trend, MAN added 2.75 eur, or 2.31 pct, at 121.96, on the top of a list of seven gainers.

Its shares were boosted by a newspaper report that said Sweden's Scania AB is preparing to launch a bid for the German heavy trucks manufacturer.

'In recent days there has been a lot of smoke about a possible takeover, now we have some fire,' said a Frankfurt-based trader reacting to the report in the Swedish daily Dagens Industri.

The newspaper said Volkswagen and Wallenberg family-controlled entities, have agreed Scania will bid for MAN, citing 'many' unnamed sources. The deal is structured so that Scania will bid for MAN, with Investor AB and the Wallenberg foundations possibly selling their stakes in Scania later on, according to the report.

The article said VW supervisory board chairman Ferdinand Piech played a crucial role in hammering out a deal.

Volkswagen, which owns around a 30 pct stake in MAN, added 1.49 eur, or 0.86 pct, at 175.57 on the news.

Bayer advanced 1.03 eur, or 2.31 pct, at 59.87, continuing the stock's long-term out-performance.

Henkel shares were 0.45 eur, or 1.28 pct, higher at 35.62, rebounding from two days of losses.

Over on the MDAX, Bilfinger Berger fell 3.04 eur, or 4.97 pct, at 58.08 as the worst performer on the index.

IKB meanwhile, added 0.33 eur, or 2.36 pct, at 14.33.

Pfleiderer, was up 0.21 eur, or 1.14 pct, at 18.68 on positive broker comments form Equinet and HSBC.

TecDAX-listed Freenet lost 0.91 eur, or 4.79 pct, at 18.09, after Boersen-Zeitung cited a United Internet AG spokesman as saying that the TecDAX peer will not launch a takeover bid for Freenet this year.

At the other end of the index, Pfeiffer Vacuum, gained 1.47 eur, or 2.21 pct, at 67.85.

frederik.richter@thomson.com

fr1/jlc/fr1/slm

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