Carmakers' shares zoom ahead on Frankfurt stock exchange

Shares in German carmakers were leading the pack on Tuesday, driving the overall stock market higher on the back of better-than-expected results for Daimler and strong sales for BMW.

Daimler shares shot up 4.87 percent to an intraday high of 57.91 euros, BMW shares jumped by 4.53 percent to 73.21 euros and Volkswagen shares raced ahead by 3.89 percent to 117.70 euros.

The overall blue-chip DAX 30 index was up 1.3 percent.

Daimler, which owns the prestigious Mercedes brand, had surprised the markets late Monday with a better-than-expected operating profit for the second quarter.

While consensus forecasts had been pencilling in earnings before interest and tax (EBIT) of 3.65 billion euros ($4.0 billion) for the period from April to June, Daimler said it booked a quarterly profit of 3.97 billion euros, despite various one-off charges.

"Compared to the first quarter, EBIT soared by 48 percent," said Equinet analyst Holger Schmidt.

"After a weak start into the year which had been burdened by a couple of issues and most notably the ramp up of the new E-class, it looks like Daimler is now running at full steam," Schmidt said.

Daimler is scheduled to publish its full second-quarter results on July 21.

Close rival BMW announced that it sold 1.16 million vehicles worldwide in the first six months, an increase of 5.8 percent over the same period a year earlier, driven by robust demand in Europe and Asia.

The gains mark a turnaround for car shares, which have been among the heaviest losers on the DAX so far this year, with Daimler shedding 26 percent since the beginning of the year, BMW down by 25 percent and VW down by 12 percent.

VW in particular has been hit after it came to light that it had installed emissions-cheating software into 11 million diesel engines worldwide.

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