Germany’s DAX Flirts With All-Time High a Year After Slump
Germany’s DAX Index Flirts With All-Time High a Year After Slump
(Bloomberg) -- Just a year after it was plagued by political and economic woes, Germany’s DAX Index is flirting with a record high.
The benchmark gauge is just points away from surpassing its January 2018 peak, following its biggest annual surge in six years. The risk-on sentiment has continued into 2020, with shares rallying on Thursday on optimism the fallout from the U.S.-Iran conflict will be contained and amid positive economic data from Europe’s largest economy.
The DAX has seen a strong rebound since it sank to a 2016 low just over a year ago, helped by surging shares of industrials such as Linde and MTU Aero Engines AG, retailer Adidas AG, reinsurer Munich Re and software giant SAP SE. German shares also benefited from investors favoring cyclical stocks last year.
“Equity markets remain true to themselves in shrugging off any concerns,” said Andre Koppers, a fund manager at Oberbanscheidt & Cie. “We are allowed to be curious how long this will go on.”
The index fell as much as 24% from its all-time high in January 2018, plagued by trade uncertainty, Brexit worries and a slowing economy that saw numerous profit warnings from German companies, before it began its ascent last year. It is now about 0.4% away from its last peak.
Seven of the 30 DAX members just hit 52-week highs, Bloomberg’s market breadth data shows. MTU Aero Engines and Adidas have led the index since it last reached a record in January 2018, while some of the gauge’s current and former heavyweights underperformed including Deutsche Bank AG, Bayer AG, BASF SE and Deutsche Lufthansa AG.
A report Thursday showing a rebound in German industrial production boosted investor optimism further, offering a sign that Europe’s largest economy may be near the bottom of its manufacturing slump.
To contact the reporter on this story: Jan-Patrick Barnert in Frankfurt at jbarnert3@bloomberg.net
To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Namitha Jagadeesh, Paul Jarvis
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