Economic data in the EU shows signs of weakness, yet Dax continues to climb, with attention shifting towards the upcoming Trump-Putin summit.
The German stock market, as represented by the DAX, experienced a rise on Thursday despite slightly weaker-than-expected EU economic data and the looming summit between Donald Trump and Vladimir Putin.
The DAX was calculated at around 24,275 points at approximately 12:30 PM, 0.4 percent above the previous day's closing level. The European common currency was slightly weaker, with one euro worth 1.1687 US dollars and one dollar worth 0.8557 euros.
The rise was primarily driven by easing trade tensions, Germany's large fiscal stimulus, and optimism in defense and exporter stocks. German exporters such as Rheinmetall and Airbus benefited from the €1 trillion fiscal stimulus and EU-US trade deals, offsetting concerns from weaker retail sales and geopolitical risks.
Defense stocks led the gains, with Rheinmetall rallying notably, due to expectations of increased military spending. Meanwhile, the auto sector performance was mixed, and there was cautious investor sentiment ahead of crucial Purchasing Managers’ Index (PMI) data and Federal Reserve signals. However, positive upsides in Germany’s manufacturing output and a stronger-than-expected private sector growth in August provided additional support.
Market expert Andreas Lipkow stated that market participants have reacted calmly to the slightly weaker-than-expected economic data from the EU. Despite the focus on the upcoming summit between Donald Trump and Vladimir Putin, the mood among Dax-40 companies remains calm, according to Lipkow.
The industrial production and GDP figures in the EU came in slightly lower than expected, but no new information was provided about the summit between Donald Trump and Vladimir Putin. The Dax was not mentioned to have changed its position in the green zone or its closing level from the earlier stated facts. The price list of Dax-40 companies was not specified to have changed, and no mention was made of the Dax-40 companies' mood or any change in calmness.
[1] Source for macro-economic support, easing trade conflicts, sector-specific optimism, and moderately positive economic indicators: [Insert Source Here] [2] Source for defense stocks leading gains and Rheinmetall's notable rally: [Insert Source Here] [3] Source for positive upsides in Germany’s manufacturing output and a stronger-than-expected private sector growth: [Insert Source Here]
- The rise in the DAX could be attributed to the positive impact of easing trade tensions, the large fiscal stimulus in Germany's industry, optimism in defense and exporter stocks in the finance sector, and moderately positive economic indicators.
- The notable rally in defense stocks, particularly Rheinmetall, was caused by expectations of increased military spending, which positively influenced the overall business environment in the industry.
