Emmanuel Thomas, DPA, Friday, May 19, 2023
BERLIN – Germany’s leading DAX stock market index hit a record high on Friday afternoon, eclipsing the previous peak set in November 2021.
Driven in part by cautious optimism about progress in the dispute over raising the US debt limit, the DAX index rose 0.8% on Friday to hit 16,292 points after hovering just under 16,000 points for much of the week.
The previous high was reached before surging inflation and the economic fallout of Russia’s invasion of Ukraine drove up interest rates and caused stock prices to drop worldwide.
The DAX, which is made up of 40 leading blue-chip German firms, has been steadily recovering since mid-autumn 2022.
The index’s recovery was buoyed by China’s decision in late 2022 to finally drop tough Covid-19 restrictions.
The Chinese economy, an important driver of the global economy and one of Germany’s main trading partners, has continued to falter, especially in industry. But there are also positive signals.
“In the current reporting season, European manufacturers of automobiles, luxury goods and sporting goods are confirming a healthy recovery in Chinese sales, even if the strong upswing from the first quarter does not appear to be sustained over the entire year,” analyst Sven Streibel of DZ Bank explained recently.
Particularly important, according to Streidel, is that exporters anticipate a continued recovery in Chinese consumer behaviour.
