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German blue-chip DAX index breaks 8,000-point mark

, March 11, 2013, 0 Comments

Germany’s blue-chip DAX has surpassed the 8,000-point mark as both big and small investors grow more confident with global economic prospects. The index looks set to rise even higher this year.

Germany’s DAX index comprising the country’s 30 strongest blue-chip companies briefly cleared the 8,000-point hurdle in early Friday trading.

That psychologically important barrier was last surpassed in January 2008 before the start of the global financial crisis that saw stocks all over the world plummet.

With accommodative monetary policies by many central banks, including the European Central Bank (ECB), and huge liquidity in the markets right now, the recent DAX rally came as no big surprise to most analysts.

It’s not least because of a rather loose monetary policy that dividend-paying stocks in particular will most likely continue to be on the rise. “The DAX rally will go on, because there are currently not really any other sound alternative investment opportunities,” TAO Capital economist Ludwig Donnert said in a statement.

On to pastures new

The stock market kept booming against the backdrop of fresh positive figures from the US labor market and Thursday’s comments by ECB President Mario Draghi who told reporters after a regular board meeting that there were more and more signs the worst of the protracted eurozone debt crisis was over.

In Germany itself, business confidence has returned after a 0.6-percent economic contraction in the final quarter of 2012. Entrepreneurs expect the country to swing back into growth in the months ahead.

With yields on bank deposits and safe-haven German sovereign bonds at an historic low, ongoing strong investment in stocks looks inevitable. Analysts believe the DAX could reach 8,700 points in the course of the year, way above the all-time high record of 8,157 points in July 16, 2007.

Source: Deutsche Welle | www.dw.de






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Deutsche Welle (DW) is Germany’s international broadcaster, Headquarters in Bonn and Berlin, having full range of presence in television, radio and online services. DW is known for its in-depth, reliable news and information in more than 30 languages ...more