German Stocks Drop After Merkel, Sarkozy Meet; Infineon Falls

Wednesday, 17 Aug 2011 06:54 AM


  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink

German stocks dropped after Chancellor Angela Merkel and French President Nicolas Sarkozy rejected a broadening of Europe’s rescue fund and calls for joint euro borrowing.

Deutsche Boerse AG led declines, falling 6.8 percent as the leaders resurrected plans for a financial transaction tax rejected by the European Union in 2010. Deutsche Bank AG, Germany’s biggest lender, fell 2.3 percent. Infineon Technologies AG slid after Morgan Stanley lowered its recommendation on the industry and Dell Inc. cut a forecast.

The DAX sank 1.2 percent to 5,926.12 as of 11:32 a.m. in Frankfurt after dropping as much as 2.1 percent. The gauge has tumbled 21 percent from this year’s high on May 2, entering a so-called bear market on Aug. 8, amid concern that the global economic recovery is stalling as Europe struggles to contain its sovereign-debt crisis. The broader HDAX Index fell 1.1 percent.

Merkel and Sarkozy rejected an expansion of the 440 billion-euro ($633 billion) rescue fund and rebuffed calls for joint euro borrowing to end the debt crisis, saying greater economic integration was needed first.

“Most market participants weren’t expecting the meeting to yield any significant progress on the debt crisis but they also weren’t expecting the idea of a financial transaction tax to resurface either,” Jonathan Sudaria, a dealer at London Capital Group, wrote. “The punitive measure is only likely further to hurt the financial sector.”

Harmonized Tax Rates

Merkel and Sarkozy agreed to press for closer euro-area cooperation, tougher deficit rules and a harmonization of their corporate tax rates. A plan to resubmit a financial-transaction tax, which the European Union rejected in 2010, sent stocks lower in New York trading. The leaders of the euro area’s two biggest economies spoke after a two-hour meeting in Paris.

New shares of Deutsche Boerse, which is seeking to buy NYSE Euronext to create the world’s largest stock and derivatives exchange, fell 6.8 percent to 40.33 euros. Deutsche Bank lost 2.3 percent to 30.04 euros.

Germany’s public banks said they continue to oppose the implementation of a financial-transaction tax in Europe, according to an e-mailed statement from VOeB, an association which represents the lenders.

“Recent regulation means banks are already at their limits with regards to their financial, organizational and personnel abilities,” the group said.


Infineon, Europe’s second-largest chipmaker, slid 3.6 percent to 5.84 euros. The European semiconductor industry was cut to “cautious” at Morgan Stanley, while Dell, the second- largest personal-computer maker, missed analysts’ sales estimates and cut its revenue forecast.

Aixtron SE, the maker of equipment used to produce LED screens, lost 9.3 percent to 15.82 euros. The stock was cut to “hold” from “buy” at Deutsche Bank.

Heidelberger Druckmaschinen AG tumbled 5.8 percent to 1.56 euros after the German maker of printing presses was cut to “sell” from “neutral” at UBS AG.

Nordex SE, a turbine maker, advanced 3.1 percent to 4.24 euros. Vestas Wind Systems A/S, the largest wind-turbine maker, posted second-quarter earnings that beat analysts’ estimates.


© Copyright 2014 Bloomberg News. All rights reserved.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Obama Executive Order Gives Pay Raise to Federal Workers

Friday, 19 Dec 2014 22:36 PM

Federal workers and uniformed military service members are getting a 1 percent pay boost. . . .

Mental Illness History Ruled on Appeal to Not Bar Gun Ownership

Friday, 19 Dec 2014 22:14 PM

A federal appeals court concluded that a history of mental illness shouldn't bar citizens from owning a weapon in a firs . . .

China Arrests US Aid Worker on North Korean Border

Friday, 19 Dec 2014 21:56 PM

China has arrested an American Christian aid worker based near its border with North Korea, his lawyer said Saturday, as . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved