Frankfurt (awp/afp) – The Dax index of the Frankfurt Stock Exchange crossed the 21,000 point mark for the first time on Monday, reaching a new record on the day of Donald Trump’s inauguration and despite a sluggish German economy.
Around 2:40 p.m. GMT, the German index comprising 40 stocks showed 21,025 points, up 0.58% while the American markets were to remain closed on Monday for Martin Luther King Day.
The DAX continues its momentum from the start of the year, having already increased by almost 900 points last week to quickly approach 21,000 points.
“Investors still cannot get enough of the rise, which is now continuing with momentum similar to that observed last November,” observes Jochen Stanzl at CMC Markets.
To the point that the flagship German index has recently become “the discreet star among the world stock indices”, according to the analyst, offering a striking contrast with a German economy in recession for two years and which doubts more than ever its exporter model.
The prospect of a new American president has managed to electrify the stock market at this stage: “investors see that Trump will do everything to improve the promotion of the American economy, and this could also encourage competing countries like China, India and the European continent also want to strengthen their economies,” Robert Halver, at Baader Bank, told AFP.
With the consequence that “German industrial companies, well positioned internationally, could benefit from this support”, he adds.
-The behemoths Deutsche Telekom, Siemens, SAP, Allianz and Airbus “contributed only about a third of the total increase last week”, observes Mr. Stanzl.
Deutsche Bank, chemists BASF and Bayer as well as chipmaker Infineon joined the party to broaden the base of the rise.
A weak euro against the dollar and stabilized Chinese growth could, however, bring dynamism to the leading European economy, which is still a strong exporter, believes Joachim Stanzl.
Finally, the legislative elections in Germany, scheduled for February, hold out to investors the prospect of “more business-friendly policies, tax cuts and deregulation measures” demanded by the economy, he concludes.
jpl/smk/cm
