Germany’s DAX Index closed at a record high, following similar milestones reached by France’s CAC 40 and UK’s FTSE 100 earlier this year.
(Bloomberg) — Germany’s DAX Index closed at a record high, following similar milestones reached by France’s CAC 40 and UK’s FTSE 100 earlier this year.
The index pared gains in the final moments of trading as US debt-ceiling talks hit a roadblock with Republican negotiators abruptly left a closed-door meeting with White House representatives soon after it began. The benchmark closed 0.7% higher at 16,275.38 points, eclipsing 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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