DAX hits a new peak on Ascension Day
Germany's top stock index, the DAX, reaches a new record high on Ascension Day. Siemens Energy leads the rally. Weak US employment data also boosts the market.
On Ascension Day, the DAX hit an all-time high, building on its recent winning streak in early trading. But it wasn't until the afternoon that the index reached these new heights. Positive signals from China's economy and encouraging labor market data from the U.S. provided a boost. However, the lack of trading activity may have been the main cause behind the significant price increase, as "in a thin market, fewer trades can still push the DAX in the long term," says portfolio manager Thomas Altmann from QC-Partners.
The DAX ended with 18,686.60 points, gaining 1.02 percent from the previous day. The MDax mid-cap index rose by only 0.05 percent to 26,708.90 points.
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"Chinese trade data suggests a continuous economic recovery, and this view is driving European investors to buy shares of export-oriented companies," says market analyst Andreas Lipkow. Additionally, the number of new jobless claims in the U.S. rose more than expected, fueling speculation that the U.S. could cut interest rates soon. This, in turn, boosted the German stock market. However, Lipkow is skeptical and thinks that the DAX won't be able to maintain its position above 18,600 points as trading picks up.
Siemens Energy's shares continued their midweek surge, rising 3.3 percent. Analysts were optimistic after the energy technology company raised its forecast on Wednesday following a strong quarter. Demand for network technology is impressive, according to industry expert Sean McLoughlin from HSBC bank. And the issues with Siemens Gamesa's loss-making wind business are also under control.
Renk's shares entered the spotlight as they replaced Varta in the SDax index. The tank transmission manufacturer, which only went public in February, gained 4.7 percent at the top of the index. The battery maker Varta was removed from the index, as previously announced, for failing to publish its audited annual financial report on time following a cyberattack.
Most German shares were priced below their dividend value, including Allianz, Mercedes, MTU, Vonovia from the DAX and Freenet, and Fuchs from the MDax.
The Euro Stoxx 50, the leading index for the eurozone, closed 0.32 percent higher at 5054.41 points. Similar advances were seen in London and Paris, where the CAC 40 rose by 0.7 percent. In New York, the Dow Jones Industrial index gained 0.4 percent by the end of European trading.
The euro gained from the weak U.S. labor market data and was last quoted at $1.0776. The European Central Bank had set its reference rate at $1.0732 (Wednesday: $1.0743). The dollar cost 0.9318 (0.9308) euros. The bond market also saw an increase in yields, which rose from 2.49 percent the previous day to 2.55 percent. The bond index Rex fell by 0.25 percent to 124.35 points. The Bund future dropped 0.27 percent to 131.00 points.
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In Frankfurt am Main, the surge in Siemens Energy's shares, driven by their positive quarterly performance and improved outlook, contributed to the DAX's share trading activity. The DAX, despite some analysts' skepticism about maintaining its high levels, continued to trade in Frankfurt am Main, reflecting the positive market sentiments influenced by various global economic indicators.
Source: www.ntv.de
