Rate Meetings Boost Index
May 02, 2011
The weighted 30-share IBIS DAX stock index that tracks prices in electronic trading advanced 5.87 to 2562.12 after slipping 11.71 Monday. Dealers said shares were helped by a favorable reaction among international financial markets to a narrower-than-expected June U.S. trade deficit. Slightly slower-than-expected July M3 money supply growth of 8.6% encouraged speculation that the Bundesbank's policy-setting Central Bank Council on Thursday will lower the securities repurchase rate modestly from the 3.30% in force since February. That move would spark some rate cuts in other European countries, especially France, and bolster the dollar, economists said. And interest-rate sensitive bank shares were up on the day, with Deutsche Bank gaining 25 pfennig to 74.65 marks. Commerzbank gained 5 pfennig to 349.70 marks after announcing that it is issuing up to 500 million marks of profit-sharing certificates. Diversified utilities and trading group Viag rose 6.80 marks to 569.40. Dealers said there was strong buying of utilities companies in electronic trading, with some investors switching out of chemicals into utilities. Meantime, construction group Philipp Holzmann rose 12.00 marks to 375.00. The company reported a 4.6% drop in first-half revenue, though it said it expects to break even financially for the year as a whole after losing 443 million marks a year earlier. The official DAX stock index that tracks prices in floor trade closed Monday up 14.40 points, or 0.6%, at 2562.76. The DAX and the IBIS DAX are composed of the same stocks and weightings though they track trends in two separate marketplaces.
