German shares higher on co earnings as investors cautious ahead of ECB meeting

German shares were slightly higher in midday trade as a raft of company earnings helped spur buying, but as investors remained cautious ahead of a European Central Bank interest rate decision scheduled for Thursday afternoon.

An anticipated mixed opening on Wall Street this afternoon, with the DJIA seen opening lower, was adding a bit of pressure to the local market.

At 12:46 p.m., the DAX was up 20.53 points, or 0.31 percent, to 6,581.92, having traded between 6,520.79 and 6,620.77.

The MDAX added 72.65 points, or 0.87 percent to 8,389.07, while the TecDAX rose 6.76 points, or 0.87 percent, to 780.41.

DAX futures lost 13.00 points or 0.20 percent, to 6,615.00, while bund futures gained 0.10 points, or 0.09 percent, to 112.87. The euro traded at $1.5465, compared with $1.5451 in London morning deals.

Local traders said positive analyst comments, technical trading, and a group of predominantly positive quarterly company earnings reports were helping to buoy major German indices.

In addition, Morgan Stanley raised its stance on European stocks to 'overweight', which was also seen helping the market.

Traders said, however, that many investors had adopted a somewhat cautious stance ahead of an ECB interest rate meeting scheduled for this afternoon.

The European Central Bank is widely predicted to leave its benchmark refi rate unchanged at 4.25 percent

The central bank raised the base rate by a quarter point the previous month as it sought to dampen inflationary pressures, but is more likely to leave the rate alone as it analyses the impact of the last rate hike.

Leading shares higher, Commerzbank gained 0.63 euros, or 2.89 percent, at 22.25, after HSBC raised its price target on the bank to 33 euros per share from 32 and reiterated its 'overweight' stance a day after the bank saw a slight drop.

On Wednesday, Commerzbank released solid quarterly earnings, but disappointed investors with larger-than-expected loan loss provisions and comments that writedowns due to the financial crisis could continue into subsequent quarter.

ThyssenKrupp shares were 0.91 euros, or 2.55 percent, higher at 36.61 after Credit Suisse reiterated its 'outperform' rating and 80 euros per share price target.

Deutsche Telekom rose 0.125 euros, or 1.10 percent, at 11.48, after the telecom giant released second-quarter numbers, which analysts and traders said were largely in line with market expectations, and it reiterated its 2008 outlook.

At the other end of the DAX, Adidas shed 1.09 euros, or 2.50 percent at 42.54, as the worst large-cap performer.

Lufthansa was 0.30 euros, or 1.92 percent, lower at 15.33, after the airline said around 360 flights were cancelled Thursday as a result of a 36-hour strike launched by pilots at the company's regional unit CityLine.

Munich Re slipped 1.55 euros or 1.37 percent at 111.38, after Citigroup lowered its target price to 122 euros per share from 140.

Allianz was down 1.42 euros, or 1.22 percent, at 111.60, after the insurer said it is abandoning its 2009 profit target because of difficult markets as it delivered slightly better-than-expected quarterly results.

Over on the MDAX, Fraport led gainers, up 2.37 euros, or 5.68 percent at 44.10, as dealers and analysts said the Frankfurt airport operator released consensus-beating bottom line figures that were underpinned by a solid revenue mix.

Premiere shares added 0.17 euros, or 1.49 percent to 11.56, after the pay television company posted solid quarterly figures on the operating side, which traders said offset a widening loss due to lost revenue through hackers.

Puma was 4.71 euros, or 2.11 percent, stronger at 228.03, boosted by second-quarter results that beat expectations and after it reaffirmed its full-year sales guidance.

At the other end of the MDAX, IVG Immobilien was down 0.61 euros, or 4.40 percent, at 13.24 as the index's worst performer.

Altana shed 0.23 euros, or 2.24 percent at 10.17, after the company reported second-quarter results that missed analyst expectations and it cut its full-year guidance, citing sliding economic growth.

Hannover Re was 0.79 euros, or 2.52 percent, weaker at 30.53, as the world's fourth-largest reinsurer released disappointing second-quarter figures, which included a bottom line that came in lower than expectations as investment income plummeted.

TecDAX-listed Aixtron was the strongest performer on its index, up 0.41 euros, or 6.93 percent at 6.33, after the semiconductor tools company reported solid second-quarter results, which should a consensus-beating bottom line.

Rofin Sinar, meanwhile, slipped 1.05 euros, or 4.07 percent at 24.75, at the other end. Tyler.Sitte@thomsonreuters.com ts/rw

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