DAX surpasses the 22,000-point threshold
The DAX soared past the 22,000-mark for the first time, marking a significant milestone. This German benchmark index saw a 0.4% increase, reaching 22,003.81 points at its peak. Global stock markets have been on an upward trend for months, driven by the hope of falling interest rates.
As RoboMarkets strategist Jürgen Molnar puts it, round numbers hold a certain allure on the stock exchange. He projects potential gains up to 22,300 to 22,500 points.
Robust corporate earnings during the reporting season had a hand in boosting investor risk appetite. The Dax surpassed 21,000 points for the first time on Donald Trump's inauguration day as the U.S. president. Its climb over the 20,000-point threshold occurred just a few weeks prior.
Key factors are propelling the DAX forward and contributing to its growth potential. These include:
- Impressive corporate earnings: Major players like SAP, with a 70% gain in 2024, have fueled the DAX's advancement[2].
- International revenue exposure: The DAX's significant exposure to U.S. markets helps it weather market volatility more effectively, making it a reflection of global economic conditions[2].
- Accommodating monetary policy: The ECB's supportive monetary policy continues to prop up equity markets, including the DAX.
- Positive market sentiment: Optimism surrounding trade agreements and economic recovery has bolstered the DAX[3].
- Strong economic performance: Germany's robust economic performance and impressive corporate earnings have driven the DAX's recent success.
- Attractive valuation: The DAX's relatively modest 18-times earnings multiple compared to the S&P 500's 28-times multiple presents an appealing investment opportunity[2].
- Technical indicators: Bullish trends, as reflected in moving averages and the Relative Strength Index (RSI), point to more potential gains for the DAX[3].
- China's economic recovery: The strength of China's economic recovery has provided a tailwind for European industries, boosting demand for European goods and positively impacting the DAX[5].
While these factors have contributed to the DAX's ascent, it must also contend with potential threats, such as geopolitical tensions and changes in ECB policy.
The robust economic performance and impressive corporate earnings in Germany have significantly contributed to the growth of the economy, allowing the DAX to surpass previous milestones such as 21,000 and now 22,000 points. With continued positive market sentiment and accommodating monetary policies, experts like RoboMarkets strategist Jürgen Molnar project potential gains up to 22,300 to 22,500 points for the DAX in the near future.
