Friday May 9, 12:04 PM
German shares lower midday on AIG losses, higher oil prices, Wall Street
FRANKFURT (Thomson Financial) - German shares were lower in light midday trade under pressure from American International Group (NYSE: AIG - news) 's (AIG) worse-than-expected losses posted late last night, continued record high oil prices, and an anticipated lower opening on Wall Street this afternoon.
At 12:31 p.m., the DAX (Xetra: news) was down 92.82 points, or 1.31 percent, to 6,979.08, having traded between 6,961.63 and 6,979.08.
The MDAX retreated 141.21 points, or 1.496 percent, to 9,525.32, while the TecDAX (Xetra: news) slid 13.26 points, or 1.57 percent, to 833.19. DAX futures were down 70.00 points, or 1.13 percent, to 7,015.00, while bund futures added 0.20 points, or 0.17 percent, at 114.85.
The euro was trading at $1.5460, unchanged for morning trade in London.
Above all shock at the $7.8 billion loss reported last night after the close of U.S. trade by AIG and an announced $12.5 billion capital increase in the coming months was hurting sentiment on the market, said trader Stefan Soellner at Deutsche Postbank (Xetra: 800100 - news) .
In addition, record high oil prices were worrying investors, he said. New York-traded West Texas Intermediate crude for June delivery climbed $1.12 to $124.81 a barrel, hitting a record high this morning.
'I don't see one single factor that might really pressure the market downwards, but the possibility of a big drop is there,' Soellner said.
Leading blue chips downwards, Deutsche Boerse (Xetra: 581005 - news) lost 4.72 euros, or 4.62 percent at 97.45, on rumours that investment group APAX might be selling its stake in the German stock market operator.
BMW (Xetra: 519000 - news) was 1.68 euros, or 4.45 percent, lower at 36.04, after it traded ex-dividend, paying out 1.06 euros per share to its investors.
Linde (Xetra: 648300 - news) shares fell 3.98 euros, or 4.14 percent, at 92.13 after the industrial gas giant released a mixed set of first-quarter results which prompted a downgrade to 'hold' from 'add' at Commerzbank (Xetra: 803200 - news) .
Deutsche Postbank was 2.19 euros or 3.66 percent lower at 57.61, as its shares traded ex-dividend after the retail bank paid out 1.25 euros per share.
Postbank shares were also under pressure as UBS (Virt-X: UBSN.VX - news) downgraded its stance to 'neutral' from 'buy' and reduced its target price to 65 euros per share from 70 euros largely on valuation grounds.
At the other end of the DAX, E.ON was the top of two gainers, up 2.11 euros, or 1.68 percent, at 127.86. Traders pointed to two variants of a rumour involving French utility giant Electricite de France (EDF (Paris: FR0010242511 - news) ) -- one in which EDF might bid for E.ON, should E.ON's bid for British Energy (LSE: BGY.L - news) fail, the second in which E.ON and EDF might launch a unified bid for British Energy.
Deutsche Telekom (Xetra: 555750 - news) was 0.06 euros, or 0.51 percent, at 11.81 as dealers pointed to rumours that private equity firm Blackstone (NYSE: BX - news) might increase it stake in the telecoms giant to over 10 percent.
'The rumour is that Blackstone may increase its stake to above 10 percent from its current stake of around 4.40 percent before the next AGM on May 15 to play a more active role in strategic decisions,' said a Frankfurt-based trader.
Neither Telekom nor Blackstone were able to comment on the rumour.
Over on the MDAX (Xetra: news) , Hugo Boss (Xetra: 524550 - news) lost 6.75 euros or 16.61 percent to 33.90, mostly due to its paying out a 6.46 euro per share dividend Friday.
At the other end, Arques led a group of six advancers, up 0.30 euros, or 3.18 percent, at 9.73.
EPCOS (Xetra: 512800 - news) was the strongest TecDAX-listed company, up 0.25 euros, or 2.24 percent, at 11.39. While Singulus shed 0.42 euros, or 4.64 percent, 8.63.
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