German shares flat afternoon, autostock gains offset by Metro, TUI losses

German shares flat afternoon, autostock gains offset by Metro, TUI losses

	Published : Wed, 21 Mar 2007 16:37 By : Agencies Print this Story

FRANKFURT (AFX) - Share prices remained largely flat in midafternoon trade as losses by Metro and TUI offset gains by auto and financial stocks, dealers said.

At 3.40 pm, the DAX was 8.85 points, or 0.13 pct, higher at 6,709.17 after trading between 6,688.34 and 6,715.15 during the first half of the day.

The MDAX was 31.85 points, or 0.32 pct, lower at 9,877.57, while the TecDAX added 4.07 points, or 0.49 pct, to 829.60.

DAX futures had gained 10.50 points, or 0.16 pct, to 6,768.50 and bund futures had lost 0.12 points, or 0.10 pct, to 116.14.

The euro traded at 1.3301 usd compared with 1.3297 in mid-morning London trade.

The DAX was able to peak into positive territory this afternoon, but a trader said he saw no fundamental reasons for the rise.

Slight gains on Wall Street and lessening fears about a possible increase of the US prime rate were helping, he said. The US Federal Reserve is expected to keep rates unchanged when it meets later today.

In Frankfurt, autostocks were in demand, with Volkswagen lifting 1.38 eur, or 3.34 pct, to 42.64 to lead blue-chips higher. BMW gained 3.69 eur, or 3.49 pct, at 109.39 on technical grounds.

DaimlerChrysler was further back in the pack, but added 0.65 eur, or 1.14 pct, at 57.45.

Financials received a boost from a positive broker note from Goldman Sachs. The brokerage raised its stance on the European banking sector -- except for investment banking -- to 'overweight' from 'neutral.'

According to the note, the German market has overreacted to the negative sub-prime mortgage news which came out of the US recently.

The overreaction gives investors the chance to enter the banking sector at a discounted share price, the brokerage said.

Mortgage lender Hypo Real Estate was 1.27 eur, or 2.75 pct, higher at 47.48.

Commerzbank added 0.25 eur, or 0.79 pct, at 31.84, while Germany's largest bank, Deutsche Bank, added 1.06 eur, or 1.10 pct, at 97.60, despite its heavy dependence on investment banking revenues.

Peer Deutsche Postbank was up 0.12 eur, or 0.19 pct, at 62.95. Traders said a bullish broker note from Sal Oppenheim was also helping Postbank shares today.

The brokerage raised its stance on Postbank to 'strong buy' from 'neutral' and pegged its price target at 80 eur per share.

SAP rose 0.20 eur, or 0.59 pct, at 34.12, after US peer Oracle reported third-quarter earnings per share of 0.25 usd, 0.03 usd above consensus, dealers said.

Some market observers had speculated Oracle might release a profit warning yesterday, which put pressure on SAP stocks throughout the day, they added.

'SAP underperformed in the German market yesterday as there were fears of a Oracle profit warning,' said one Frankfurt dealer. 'SAP's shares are relatively strong right now, but there is a chance it will retreat after Oracle said it won market share from SAP.'

On the other end, TUI lost 0.38 eur, or 2.09 pct, at 17.83, as the DAX top underperformer, after it was released that the tourism and shipping conglomerate is being probed by German market regulator Bafin over the timing of the disclosure of the merger of its tourism operations with UK's First Choice Holidays PLC.

TUI may have breached its legal obligation to disclose the deal in due time, a Bafin spokeswoman said, pointing out media reports had already announced the merger on Sunday while TUI did not disclose it until Monday.

Metro lost 1.03, or 1.84 pct, at 55.08.

The retail giant said its full-year net profit rose to 913 mln eur from 501 mln last year, beating an average analyst forecast of 895.4 mln but failing to impress as traders said the market was largely expecting numbers in that range.

According to one trader, the results contained few surprises as the world's third-largest retailer met its own goals over the last year.

Lufthansa was 0.14 eur, or 0.69 pct, weaker at 20.22, on speculation that the German flagship carrier might make a 3.90 eur per share bid for a 9 pct stake in Spanish rival Iberia Lineas Aereas SA, perhaps leading to an eventual takeover attempt, dealers said.

Traders said that a rumour on a website, hispanidad.com, said that Caja Madrid was planning to sell a 9 pct stake in Iberia. Speculation that Lufthansa might launch a bid for either the stake or the entire airline began shortly thereafter, they said.

Lufthansa, Iberia and Caja Madrid all declined to comment on the takeover speculation.

Leoni led decliners on the MDAX, dropping 1.45 eur, or 4.68 pct, at 29.56.

Hochtief dropped 1.92 eur, or 2.71 pct, at 68.84, on speculation of further sell-offs after Custodia Holdings AG's sale of its 25.08 pct stake in the German construction company to Spain's Actividades de Construcciones y Servicios (ACS) for 1.264 bln eur.

GEA Group found itself in the red after early morning gains following release of its full-year figures which came in above analysts' expectations.

Traders said the midday slump could be attributed to profit-taking or to slightly negative news that the contracts to sell its units Lurgi AG and Lentjes GmbH have not yet been signed.

Its shares were down, 0.28 eur, or 1.54 pct, at 17.87.

On the positive side, Bilfinger Berger gained 3.01 eur, or 4.69 pct, at 67.25, as the strongest performer, after CEO Herbert Bodner said this year's net profit target of 100 mln eur is a minimum goal.

Answering questions at the company's annual results news conference, Bodner also said its 5-10 pct organic growth targets for output this year are realistic levels.

Rheinmetall gained 1.05 eur, or 1.67 pct, at 64.00.

Rheinmetall AG's chief executive Klaus Eberhardt said that a merger with Kraus-Maffei Wegmann (KMW) is only 'a matter of time'.

Speaking at the company's annual results conference, he said there are currently no negotiations between the two companies because KMW is not willing to enter into talks with Rheinmetall.

Q-Cells was the sharpest gainer on the TecDAX, up 1.36 eur, or 2.93 pct, at 47.78, while GPC Biotech was down 0.46, or 2.13 pct, at 21.18.

Tyler.Sitte@thomson.com

ts/slj/ts/slj

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