Dax sets another record - year-end rally continues

Stock exchange in Frankfurt - Dax sets another record - year-end rally continues

The Dax remained on the hunt for a record on Wednesday. The leading German index closed 0.75 percent higher at 16,656.44 points. In the meantime, it set a new record at 16,727.07 points, another 175 points above its high from the previous day. In the current year-end rally since the October low, the Dax has now gained almost 14%. The MDax of medium-sized companies recorded a midweek gain of 0.93% to 26,737.58 points. However, its record high from 2021 is still a long way off.

Meanwhile, US jobs data underpins hopes that interest rates will soon fall again. The US private sector created significantly fewer jobs than expected in November. A slowdown in the labor market should help the Fed in its fight against inflation.

"Even the high share price losses at Merck are not significant today or slow down the development of the DAX," commented market observer Andreas Lipkow with regard to a 13.1 percent drop in the pharmaceutical and specialty chemicals group. Merck suffered another setback with its drug Evobrutinib for the treatment of multiple sclerosis. Two studies on the safety and efficacy of the drug had not produced the desired results, it said. As a result, the bank HSBC downgraded Merck shares to "hold" and removed the sales estimates for the drug from its valuation model.

In addition to Merck, Fresenius also disappointed investors in the pharmaceutical and healthcare sector. The medical group is not allowed to pay a dividend for the current year due to government energy subsidies. "Fresenius was a safe dividend share," said one trader. However, the share price ultimately managed to gain 0.3 percent. Fresenius Medical Care, on the other hand, fell by 1.4 percent after a cyberattack on a US subsidiary of the blood purification specialist, which was carried out in September, became known.

The shares of car manufacturer Volkswagen gained 5.4 percent at the top of the Dax. Slightly positive news came on the subject of Xinjiang: the inspectors commissioned by the Wolfsburg-based company said they had found no evidence of forced labor at the controversial plant in the Chinese province.

Bayer shares continued their stabilization attempt with a plus of 2.2 percent, although there was again bad news from the USA. Traders referred to a further verdict in a US glyphosate lawsuit against the pharmaceutical and agricultural company, which, however, did not spook investors at the low share price level.

Hensoldt shares fell by 2.1 percent, making them one of the weakest stocks in the MDax. The defense electronics group wants to take over the defense specialist ESG from Munich. The deal will be worth up to 730 million euros. The purchase is to be financed with a capital increase of up to ten percent and debt of around 450 million euros.

A positive business outlook caused Tui shares to jump 15.3 percent. The travel group is also considering leaving the London Stock Exchange and returning to the MDax. A stock exchange listing only in Germany could bring Tui advantages in the view of the Management Board. These include lower costs and a better equity profile.

The Eurozone leading index EuroStoxx 50 temporarily rose to a high since 2007 and ended trading 0.68 percent higher at 4483.26 points. The French Cac 40 made similarly significant gains, while the British FTSE 100 rose somewhat more moderately. In New York, the Dow Jones Industrial was slightly up at the close of European trading after a two-day rally break.

The euro moved little below the 1.08 US dollar mark and last traded at 1.0786 dollars. The European Central Bank set the reference rate at 1.0778 (Tuesday: 1.0817) dollars. The dollar thus cost 0.9278 (0.9244) euros.

On the bond market, the current yield fell from 2.32 percent the previous day to 2.28 percent. The bond index Rex rose by 0.15 percent to 126.17 points. The Bund future rose by 0.38 percent to 134.98 points.