The benchmark resumes the post-election rally and returns to historical highs 📈
Wednesday’s session in European markets brings back euphoria regarding local stock companies. The DE40 contract, which represents the German DAX index, has already risen by 1.2%, bringing it back to its historical highs. The reason for such strong gains is the improved market sentiment following recent sell-offs (mainly in the U.S.), but the local index continues to benefit from the Bundestag election results.
The new chancellor, Friedrich Merz, is widely regarded in the media as a representative of the financial sector. Merz worked as a judge and later as a lawyer at the prestigious Mayer Brown LLP, a firm focused mainly on servicing investment funds and major corporations. He also held high-ranking positions at BlackRock Germany and HSBC Trinkaus & Burkhardt and served on the boards of EY Germany, Borussia Dortmund, and Deutsche Börse. His strong business ties give hope that Germany’s new policies will support local businesses and ultimately help stimulate the struggling German economy.
Merz primarily advocates for lowering income and corporate taxes. Equally important are his bold promises to develop artificial intelligence and establish Germany as an attractive hub for innovative startups. The new chancellor also aims to reform Germany’s debt brake, which limits how much debt the government can take on. This is particularly crucial as the specter of long-term economic slowdown looms over Germany, and freeing up new funds could help overcome current economic challenges.
DE40 (D1 interval)
The German DAX index is up 1.17% to 22,830 points, with total gains for the first part of the week reaching 2.56%. The immediate catalyst was, of course, Sunday’s election results, which reduced investor uncertainty. The index has nearly fully recovered from last week’s correction. The nearest resistance level is just below 23,000 points, which DAX is now approaching. On the downside, the nearest support zone is above 22,000 points, where last week’s declines were halted.
Source: xStation 5
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