Germany’s DAX Index was set for a record closing high, following similar milestones reached by France’s CAC 40 and UK’s FTSE 100 earlier this year — as easing worries over US debt-ceiling talks sparked equity market rallies on both sides of the Atlantic.
(Bloomberg) — Germany’s DAX Index was set for a record closing high, following similar milestones reached by France’s CAC 40 and UK’s FTSE 100 earlier this year — as easing worries over US debt-ceiling talks sparked equity market rallies on both sides of the Atlantic.
The benchmark was up 0.7% at 10:54 a.m. in Frankfurt, putting it on course to eclipse the previous high set on Jan. 5, 2022, before Russia’s invasion of Ukraine. Defense and auto parts company Rheinmetall AG, Siemens Energy AG — a maker of gas turbines and grid technology, Adidas AG and Europe’s biggest software company SAP SE have been among the best performers this year.
A combination of better-than-feared corporate earnings, easing energy prices and a post-Covid reopening boost to China’s economy have helped fuel the rally. DAX, home to major automakers and industrials, has also benefited from greater optimism that any economic contraction will be milder than anticipated.
“The DAX is driven by export-oriented consumer and industrial stocks, and with inflation declining, consumers have more discretionary income to spend,” said Joachim Klement, head of strategy, accounting and sustainability at Liberum Capital. “Thanks to Chinese demand coming back, German industrials and automotive stocks have also re-rated substantially.”
European stocks have outperformed global counterparts this year, spearheaded by the luxury goods-heavy CAC 40 amid the revival in Chinese consumer demand.
–With assistance from Jan-Patrick Barnert.
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