German Stocks Rise On Volkswagen Restructuring; Factory Orders Beat

(RTTNews) - German stocks gained some ground in positive territory Friday morning thanks largely to Volkswagen, which moved up sharply after the company's board approved a massive restructuring plan. Data showing stronger than expected growth in Germany's factory orders contributed as well to market's rise.

Geopolitical tensions and prospects of an interest rate hike by the European Central Bank in the foreseeable future limited market's gains.

The benchmark DAX, which advanced to 26,085.52, was up 13.40 points or 0.05% at 26,020.97 a little while ago.

Volkswagen gained over 6%. The automotive major announced its plan to cut another 50,000 jobs as part of its transformation program 'Future Plan 2030' with 12 initiatives, for significant cost savings and sustainable improvement in profitability. The firm also said that it would half its model portfolio by 2035, aiming for more resilient and competitive operations under demanding market conditions, and added it will invest a three-figure billion sum over the coming years.

Infineon Technologies, Heidelberg Materials, Zalando, Continental and BMW climbed 1%-1.8%.

Siemens Healthineers, Siemens Energy, GEA Group, Vonovia, SAP and Scout24 posted modest gains.

Fresenius shed 2%. Rheinmetall, Merck, Daimler Truck Holding, BASF and Deutsche Boerse drifted down 1%-1.5%. Deutsche Telekom, Deutsche Post, Bayer, Commerzbank, Hannover RE and Adidas eased by 0.6%-0.8%.

Data from Destatis showed Germany's factory orders grew more than expected in July, reflecting the strong order growth in the manufacture of ships, railway rolling stock and aircraft. Factory orders increased 2.5% on a monthly basis in July but slower than the revised 3.7% expansion seen in June. Orders were expected to rise 0.3%.

Germany's construction sector downturn moderated notably in August amid a fresh growth in commercial activity. The construction purchasing managers' index climbed to 48.7 in August from 42.1 in July, data showed.