Soaring High: Germany's Dax Aims for 24,000 Points as Trade Tensions Ease
Dax aims for 24,000 points following the China agreement.
The stock market is buzzing with excitement! The announced truce in the ongoing trade dispute between the US and China has sent the German Dax soaring to new heights. As of this morning, the leading index is trading 1.8% higher at an astonishing 23,911.98 points, nearing the psychologically significant 24,000-point mark.
Meanwhile, the EuroStoxx 50, another leading index for the Eurozone, is still playing catch-up, reaching 5,393.19 points, a 1.49% gain for the day. The medium-sized company index (MDax) in Germany followed suit, climbing by 1.10% to 30,056.18 points. However, it's still a stretch from its record high of over 36,000 points achieved in 2021.
Major gains can be seen in export-oriented sectors, such as commodities (+4.9%), automobiles (+2.5%), and technology (+2.5%). Oil and industrial values are also on the rise, signaling a healthy economy. But it isn't all sunshine and rainbows; defensive sectors like utilities and telecommunications are showing slight losses, with pharmaceuticals bearing the brunt with a 3.2% descent. The drop in the pharmaceutical sector can be attributed to factors like announced dividends, such as Sanofi's, and Trump's recent pledge to lower US drug prices.
Futures for the S&P500 and the Nasdaq also saw gains of 2.7% and 3.5%, respectively, while the US dollar rose 1%. Interestingly, the gold price plummeted significantly in both US dollars and euros, falling around $91 and $52, respectively, as investors shy away from safe-haven assets in light of the improving global economic outlook.
The Swiss franc and the Japanese yen, two safe-haven currencies, weakened 1.5% and 1.6%, respectively, despite the strengthening dollar. The dollar index surged 1.2%, its highest level in a month, while the euro fell 0.9%, hitting a one-month low at $1.1111.
The agreement between the US and China to reduce their mutual tariffs, effective for 90 days, has sent ripples of relief across global markets. "We're sitting on pins and needles at the stock exchanges," said Thomas Altmann, portfolio manager at QC Partners. "But we'll only know as the day unfolds how far the talks have progressed and how concrete the results are."
In other news, the share price of ProSiebenSat.1 skyrocketed almost 20% following a move by PPF, the Czech ProSieben majority shareholder, to block MFE's takeover attempt and offer ProSiebenSat.1 shareholders more.
Defense stocks took a hit, with Hensoldt and Rheinmetall dropping by 6% and 3%, respectively, as Ukrainian President Volodymyr Zelensky agreed to meet with Russian President Vladimir Putin for talks in Turkey on Thursday.
The German stock market index had plummeted to just under 18,490 points in the beginning of April after Trump announced substantial tariffs and China retaliated. Since then, it has seen a strong rebound of approximately 29%, indicating a robust recovery from the economic uncertainties surrounding the trade dispute. Year-to-date, it has already gained almost 20%.
Source: ntv.de, jki/dpa/DJ
- Dax
- Stock Prices
- USA
- China
- Trade disputes
In the midst of positive trade truce announcements between the US and China, various German employment policies within the community are evaluating potential investment opportunities in the stock-market, particularly in export-oriented sectors like commodities, automobiles, and technology, due to their substantial gains. Meanwhile, pharmaceutical stocks have seen a decline, with Sanofi's announced dividends and Trump's drug price pledge contributing to this trend.
