FRANKFURT (dpa-AFX) – The Dax (DAX 40) initially continued its recent strength on Monday. The leading German index advanced by 0.40 percent to 13,850.50 points in the first few minutes after the Xetra launch. The round 14,000 mark, which was last recorded two months ago, is getting closer.
The MDAX for medium-sized companies increased by 0.37 percent to 28,009.59 points. The leading eurozone index, the EuroStoxx 50 (EURO STOXX 50), rose by 0.4 percent.
Signs of declining US inflation had recently helped the stock exchanges rise and this trend did not stop last Friday in New York trading – with a continued good run, especially for technology stocks. “But it would be too early to shelve worries about inflation, interest rates and the economy,” warned the experts at Landesbank Helaba in the morning, referring to the ongoing geopolitical risks, “which could quickly resurface.”
While in the USA, even with slightly lower inflationary pressure, interest rates will probably continue to be increased and – as in the euro zone – the main concern is how big the next rate hike will be, China is going down the path of monetary easing. In order to help the ailing economy, China’s central bank surprisingly lowered the interest rate for one-year refinancing transactions with banks on Monday for the first time since January. Recent economic data from China was weak.
With a view to the further rising Dax, Christian Henke, analyst at Broker IG, said investors seemed to be throwing any concerns overboard at the moment. “The question is whether reality isn’t bringing the markets back down to earth. The fact that energy and commodity prices are still far too high and inflation is still a world away from the Fed’s target of two percent doesn’t bother anyone.” And the latest economic data from China showed that the growth engine in China was losing momentum./ajx/mis