German stocks up, led by auto sector

Tag : auto bearing
German stocks rose in early trade, with car parts companies andauto manufacturers leading the gains.

By 9:58 am in Frankfurt, the benchmark DAX Index had advanced by68.43 points, or 1.1 per cent, to 6,221.73.

Meanwhile, the HDAX Index of the 110 largest companies in Germanyrose by 1.1 per cent.

Among the companies which led the advance was tyre companyContinental AG, which is believed to be the subject of a takeoverbid from ball-bearing firm Schaeffler Group.

Continental gained by 22 per cent, which is its largest advancesince August 1992.

Meanwhile, crude oil for August delivery falling to $142.49 spurredrises for BMW and Volkswagen.

Elsewhere, financial companies benefited from the news that USTreasury Secretary Henry Paulson is set to provide assistanceFannie Mae and Freddie Mac in a bid to restore confidence in themarkets.

Robert Halver, head of research at Baader Bank, told the Bloombergnews agency: "The comments that Fannie Mae and Freddie Macwill be supported by hook or by crook is relaxing the markets.

"If those figureheads would be allowed to collapse, bankscould dump their mortgage refinancing and that would open Pandora'sbox."