The German stock market took another step towards a record on Monday. Investors were not put off by the disappointing Ifo business climate. However, trading was very quiet, with markets in Great Britain and the USA closed for public holidays. In addition to the absence of international investors, there was also a lack of impetus from New York.
The Dax closed trading up 0.44 percent at 18,774.71 points. The MDax, which includes medium-sized German stocks, gained 0.58 percent to 27,281.48 points.
The mood in the German economy surprisingly did not improve in May after three consecutive increases. “Accordingly, the economic trees are not growing to the sky – at least not at the moment,” said chief economist Christian Lips of NordLB. However, he does not want to overvalue a single value, because the signs of a gradual stabilization of the economy remain clearly in the majority. This view also seems to prevail on the financial markets, he said with a view to the DAX.
According to Lips, the deteriorating business situation is a warning against excessive optimism. On the other hand, given the economic situation, there are no serious obstacles to the European Central Bank cutting interest rates for the first time in June. Uncertainty about the central banks’ future monetary policy recently slowed the record rally in the DAX after the leading index reached a high of 18,892 points in mid-May.
Company announcements were in short supply. Some stocks were conspicuous by their counter-reactions to their recent price development. Car stocks became a pillar of support for the DAX. Porsche AG shares, which rose 2.8 percent, took the lead in the index and recovered from their recent low since mid-March. Volkswagen shares rose 1.7 percent. Premium car manufacturers Mercedes-Benz and BMW also ended trading higher.
In the MDax, Wacker Chemie was in demand, a share that has had a rather difficult time so far in 2024. Only on Friday did it reach its lowest level since February. Despite the recovery of 4.3 percent on Monday, the specialty chemicals group’s annual balance sheet remains in the red, with a loss of more than seven percent.
Ionos, which is part of the SDax small cap index, went in the other direction due to profit-taking, and the investment bank Morgan Stanley took the wind out of the price rally’s sails. The web host’s shares fell by 5.5 percent after analyst George Webb gave up his positive recommendation. He now considers the opportunities and risks to be fairly balanced.
The Eurozone’s leading index, the EuroStoxx 50, rose by 0.47 percent to 5059.20 points. The Cac 40 in Paris recorded similarly high price gains. In London, trading was suspended due to the “Spring Bank Holiday” and in New York, trading was paused on “Memorial Day”.
The foreign exchange market was relatively quiet. The euro was trading at 1.0859 dollars at midday. The European Central Bank (ECB) had set the reference rate at 1.0840 dollars on Friday.
On the bond market, the yield on bonds rose from 2.64 percent on Friday to 2.66 percent. The Rex bond index fell by 0.06 percent to 123.74 points. The Bund future rose by 0.18 percent to 130.34 points.
Source: Stern
