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FRANKFURT (AFX) - Shares were off intra-day lows in midafternoon trade as US stock futures pointed to a positive start on Wall Street this afternoon, though they remained in negative territory amid weakness in financial stocks and as Bayer slid after Merck upped its stake in Schering, dealers said.
At 2.56 pm, the DAX 30 index was 33.06 points or 0.61 pct lower at 5,431.02, having moved between 5,399.77 and 5,470.23 so far this session.
The MDAX was at 7,595.66, down 103.06 points or 1.34 pct, while the TecDAX was at 622.07, down 7.55 points or 1.20 pct.
The DAX futures contract was at 5,432.50, up 20.50 points or 0.38 pct, while bund futures were at 116.61, up 0.13.
The euro last traded at 1.2587 usd, against 1.2586 in midday London trade.
Financial stocks were all in the red, with commercial real estate lender Hypo Real Estate leading large-caps lower, dropping 1.04 eur or 2.29 pct to 44.45.
Insurance giants Allianz and Munich Re slipped 0.91 to 115.19 and 0.96 to 100.79 respectively, while Deutsche Bank lost 0.49 to 84.65 and Commerzbank slid 0.23 to 26.30.
Bayer was another weak spot, falling 0.65 to 32.45, amid concerns its plans to take over Schering might fail or that it might have to raise its offer or divest parts of the business to acquire Merck's stake, following news that Merck has increased its stake in Schering to 18.6 pct.
Bayer's 86 eur per share takeover offer is conditional on a 75 pct minimum acceptance rate by Wednesday, meaning that Merck now needs just over another 6 pct to block the takeover, with sources today saying that Merck indeed is planning to raise its stake to over 25 pct.
Bayer was also in focus as the Frankfurter Allgemeine Zeitung reported that some Schering shareholders have withdrawn their acceptances to tender shares to Bayer, which on Saturday said it holds a 61.52 pct stake in Schering.
'It is now very doubtful whether Bayer will reach the 75 pct minimum acceptance rate by Wednesday,' Landesbank Rheinland-Pfalz said.
Schering was down 0.27 at 85.98, while Merck slid 1.90 to 72.05, erasing initial gains, after LG Philips LCD, a joint venture between South Korea's LG Electronics and Royal Philips Electronics NV, lowered its second-quarter guidance for shipments and its EBITDA margin forecast.
Meanwhile, ThyssenKrupp was the best performer, rising 0.17 eur or 0.70 pct to 24.48, following upbeat comments from Morgan Stanley, which reiterated its 'overweight' rating and 38.50 eur price target on the stock.
'Our meeting with Mittal management last Friday increased our conviction on staying 'overweight' (on ThyssenKrupp) -- our 38.50 eur price target implies 61 pct upside,' said Morgan Stanley.
Linde added 0.22 to 61.22, as UBS raised its rating on the stock to 'neutral' from 'reduce' and lifted its price target to 66 eur from 62, arguing that the stock has fallen to a level near its price target.
'Following a 17 pct sell-off from peak levels (and) with 9-12 pct underperformance versus three peers we upgrade to 'neutral' from 'reduce',' said UBS.
BMW gained 0.09 to 38.43, after Dresdner Kleinwort Wasserstein upgraded the shares to 'buy' from 'hold', with an unchanged price target of 46 eur.
'BMW's fundamentals hardly changed over the past weeks (but) nevertheless, the share price dropped some 20 pct,' DKW said in a note to clients, adding that the shares are currently trading at levels 22 pct below their historical average.
The broker also said that the German auto giant's recent sales performance, its protection against forex fluctuations and the ongoing strong cash generation were convincing arguments for its 'buy' rating on the stock.
However, peer VW was down 0.45 at 51.98, while DaimlerChrysler eased 0.16 to 37.99.
SAP added 0.50 to 157.10, after UBS upgraded its stance on the issue to 'buy' versus 'neutral' with a 200 eur price target.
On the MDAX, Vivacon slumped 1.06 eur or 4.69 pct to 21.56, while Medion gained 0.28 eur or 2.76 pct to 10.43.
Solarworld was down 146.05 eur or 75.24 pct at 48.05 on the TecDAX, amid today's 1:3 stock split, while Tele Atlas rose 0.17 eur or 1.03 pct to 16.72.
niklas.magnusson@afxnews.com
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