DAX at three-year high as oil fears fade
7 September 2005, FRANKFURT - Germany's main stockmarket index, the 30-share DAX, briefly surpassed the 5000 level Wednesday for the first time in more than three years as investors' fears of a further rise in oil prices faded.
7 September 2005
FRANKFURT - Germany's main stockmarket index, the 30-share DAX, briefly surpassed the 5000 level Wednesday for the first time in more than three years as investors' fears of a further rise in oil prices faded.
The German market, taking its cue from rising stock prices on Wall Street, took prices higher till the DAX had peaked at 5004.23 mid-way through the morning, then settled back to 4990 as of mid-afternoon.
From April to mid-August, the DAX steadily rallied from 4200 to the verge of 5000, then faltered. A fresh rally set in two weeks ago.
Despite the bullish view in the market, Germany's economy is anything but healthy, with unemployment above 11 per cent, consumer demand shrinking rather than growing, and business sentiment gloomy.
Exports, mainly to economically more robust European neighbours, have been the sole silver lining in the persistent clouds over Germany. The last time the DAX was above 5000 was on May 28, 2002.
Some investors also perceive Germany's economy as more likely to rebound after the September 18 general election, with the centre- right Christian Democrats set to topple Chancellor Gerhard Schroeder's Social Democrats and Greens coalition.
One brokers said, "Given that the election is so close, I think the market is also being held up by the political climate."
He said a main reason for the high prices was growing relaxation among investors about the repercussions from Hurricane Katrina after fears that the disaster would trip up U.S. economic growth.
In Germany, investors were also cheered by an unexpectedly strong July rise in industrial output announced by the Economics Ministry.
Among individual DAX stocks that pushed higher was Commerzbank, which gained 2.1 per cent to 22.14 euros after the bank said it was disposing of its 10-per-cent stake in Heidelberger Druckmaschinen since the printing press maker was not a core business.
Subject: German news