German Stocks Fall, Led by Allianz, Munich Re; Postbank Gains

German stocks dropped, led by Allianz SE and Munich Re after Swiss Reinsurance Co., the world's largest reinsurer, posted a loss of 1.2 billion Swiss francs ($1.07 billion) on two credit-default swaps.

Deutsche Postbank AG advanced after Frankfurter Allgemeine Zeitung reported the country's largest bank by clients may be sold.

The benchmark DAX Index dropped 16.08, or 0.2 percent, to 7,596.18 at 11:01 a.m. in Frankfurt. DAX futures expiring in December decreased 17.5, or 0.2 percent, to 7,624. The HDAX Index of the country's 110 biggest companies also lost 0.2 percent.

``Stocks are not en vogue as an asset class at the moment,'' said Michael Scholz, an equity strategist at WestLB AG in Dusseldorf, Germany. ``The trading pattern over the past ten days has confirmed a down trend. If the DAX doesn't rise above 7,680 this week sentiment will remain negative.''

Deutsche Boerse AG's Xetra electronic trading system was halted for about one hour today because of technical problems.

Allianz, Europe's largest insurer, lost 2.34 euros, or 1.7 percent, to 139.43 euros. Munich Re, the world's second-biggest reinsurer, dropped 1.26 euros, or 1 percent, to 119.74 euros.

Swiss Re said today it designed the credit-default swaps to provide protection for clients against declines in the value of investment portfolios consisting mostly of mortgage-related securities.

Deutsche Postbank gained 2.30 euros, or 4.4 percent, to 54.99 euros. Owner Deutsche Post AG sees a ``line'' of potential buyers for the bank, Frankfurter Allgemeine Zeitung reported, citing an interview with Chief Executive Officer Klaus Zumwinkel. Deutsche Post climbed 24 cents, or 1.1 percent, to 22.41 euros.

The following stocks also rose or fell in German markets. Symbols are in parentheses.
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