The year-end rally on the German stock market is in full swing. Driven by expectations that interest rates will soon fall, the Dax surpassed the 16,300 point mark on Friday morning. From a chart perspective, the path to the record high of almost 16,529 points is clear.
At lunchtime, the leading German index gained 0.80 percent to 16,344.42 points and is heading for a weekly increase of 2.0 percent. The MDax of medium-sized companies rose by 0.65 percent to 26,353.10 points on Friday.
Support comes primarily from the USA. There are signs of a friendly start to the stock market. The day before, the Dow Jones Industrial had reached its highest level in around two years following encouraging data on consumption and price inflation. In China, the mood in industrial companies also improved surprisingly significantly and points to an increase in economic activity again. Nevertheless, there are still many economic concerns in the world's second largest economy.
The rally has now pushed the Dax up by almost 12 percent from its October low. In November, the leading German index gained 9.5 percent, making up for most of the correction since August. In addition, the German stock market barometer is heading for its fifth week in a row with profits. That would be the longest winning streak in 2023, after the longest losing streak of the year.
Investors rewarded the US Federal Reserve's good job, says Stephen Innes, Managing Partner of SPI Asset Management, explaining the strong run. The Fed fought inflation without triggering a severe recession. More moderate inflation would now call into question the high level of interest rates, which is why investors expected interest rate cuts to occur soon. This also applies to the Euroregion. The weakening of inflation is likely to continue there in the coming months, write the experts at Landesbanl Helaba. “We can increasingly bet that the next interest rate move will be a cut,” they conclude.
This gave real estate values a further boost. Vonovia gained 1.8 percent in the Dax and LEG rose by 1.5 percent in the MDax.
Otherwise, the shares of Bechtle and Jenoptik were particularly in focus in the index of medium-sized companies. Bechtle, at the bottom, fell by 4.8 percent, while Jenoptik at the top of the index rose by 4.4 percent. The IT service provider Bechtle obtained fresh financial resources with the help of a convertible bond and wants to use the money for, among other things, acquisitions at home and abroad Use abroad. The technology group Jenoptik, on the other hand, raised its medium-term profitability targets on the occasion of its capital market day.
Rational won 2.9 percent. The investment bank Hauck Aufhäuser now recommends buying the shares. After the Capital Markets Day on Thursday, analyst Simon Keller sees a new product from the commercial kitchen supplier as a potential “game changer”. If successful, this would have plenty of sales potential, it was said.
At minus 2.9 percent, Metro AG's shares were among the weakest SDax values. The US bank JPMorgan is more negative for the wholesaler and downgraded the shares to “underweight”.
The shares of the New York-listed Covid vaccine manufacturer Biontech lost 3.7 percent on Tradegate. They were also downgraded to “Underweight” by JPMorgan. Analyst Jessica Fye expects estimates for Biontech to fall. This, as well as longer development times for new products, could stand in the way of a price recovery.