The rapprochement in the tariff dispute between the EU and China gave the DAX some momentum again on Monday. The German leading index closed 0.89 percent higher at 18,325.58 points, mainly thanks to the popular car stocks. In the previous week it had recovered somewhat despite the profit-taking on Friday. The MDax of medium-sized companies actually rose by 1.61 percent to 25,703.64 points on Monday.
The uncertainty before the parliamentary elections in France did not affect the prices, at least at the beginning of the week. This was also true in Europe: the Eurozone’s leading index, the EuroStoxx 50, closed almost 0.9 percent higher, as did the Dax. In Paris and London, the index also rose. The New York leading index, the Dow Jones Industrial, was up almost one percent at the end of European trading, while the technology-heavy Nasdaq 100 fell by 0.3 percent.
In the DAX, the shares of the car manufacturers benefited from the fact that China and the EU want to negotiate with each other in the dispute over e-car tariffs. Even if the chance of an agreement is viewed critically, the announced talks were initially enough to provide some relief to investors. The shares of BMW, Porsche AG, Volkswagen and Mercedes-Benz rose by up to 2.7 percent.
After temporarily higher profits, index leader Covestro ended up with a gain of 5.1 percent to 53.86 euros. Based on a proposed offer price of 62 euros per share, the plastics company confirmed that concrete negotiations would begin with the state-owned oil company Adnoc from the United Arab Emirates. However, the top price of 55 euros was still some way off the possible offer.
Siemens Energy shares rose by 4 percent, further boosting the DAX. Saudi Arabia commissioned the energy technology group to build power plants worth billions.
The biggest winner in the SDax small cap index were the recently battered shares of Deutz: They jumped by a good 20 percent thanks to investors’ fantasy that the engine manufacturer could enter the booming defense business. The company is considering supplying engines for wheeled defense vehicles, wrote the “Welt am Sonntag” after a conversation with CEO Sebastian Schulte.
The euro found its way back up and was last worth 1.0725 US dollars. The ECB had previously set the reference rate at 1.0730 (Friday: 1.0688) dollars.
On the bond market, the yield on bonds rose from 2.42 percent on Friday to 2.46 percent. The Rex bond index fell by 0.13 percent to 125.05 points. The Bund future fell by 0.20 percent to 132.34 points.
Source: Stern
