German Stocks Retreat; MAN, ThyssenKrupp, Infineon Pace Decline

German stocks dropped after the European Central Bank said the ``sharp'' increase in the October inflation rate is ``a matter of particular concern,'' raising talk borrowing costs will rise and slow earnings growth.

MAN AG, ThyssenKrupp AG and Infineon Technologies AG paced the decline.

``What we see is an unpleasant combination of slowing growth and high inflation,'' said Matthias Joerss, an equity strategist at Sal. Oppenheim Jr. & Cie. in Frankfurt. ``Growth forecasts are lowered gradually. That's bad for industrials.''

The benchmark DAX Index lost 77.73, or 1 percent, to 7,705.38 at 12:25 p.m. in Frankfurt. DAX futures expiring in December decreased 81, or 1 percent, to 7,737.50. The HDAX Index of the country's 110 biggest companies retreated 1.2 percent.

The ECB said the rise in the October inflation rate to 2.6 percent from 2.1 percent the previous month is ``a matter of particular concern and it is essential that it does not affect medium to longer-term inflation expectations.''

MAN, Europe's third-largest truckmaker, lost 4.99 euros, or 4.4 percent, to 107.45 euros.

ThyssenKrupp, the country's largest steelmaker, dropped 1.59 euros, or 3.9 percent, to 39.32 euros.

Infineon, Europe's second-largest maker of semiconductors, lost 30 cents, or 3.2 percent, to 9.20 euros.

ABN Amro Holding NV downgraded the stock to ``hold'' from ``buy'' citing a negative impact of the strong euro on revenue and margins and setting its price estimate at 10 euros a share.

Lehman Brothers Holdings Inc. cut its price estimate for the shares 19 percent to 13 euros citing ``material cuts'' to its estimates for Infineon's unprofitable memory-chip unit Qimonda AG. Citigroup Inc. lowered its price projection 2 percent to 14.60 euros.

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

BDI Biodiesel International AG (D7I GY) advanced 32 cents, or 1.8 percent, to 17.82 euros. The builder of factories that make fuel from organic products said third-quarter sales surged 69 percent.

Lanxess AG (LXS GY), the maker of chemicals used by the textile and leather industry, dropped 1.74 euros, or 5.7 percent, to 28.55 euros, the steepest drop in the HDAX today.

Lehman Brothers and Merrill Lynch & Co. cut their price projections for the stock, both citing the weak dollar.
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