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Frankfurt (dpa -AfX) – The communication between the Union and SPD on an enormous financial package for armaments and infrastructure on Wednesday catapulted numerous shares from these industries in two digits. The entire stock exchange benefited: Dax, MDAX and SDAX won between 3.3 percent and 5.8 percent.
The debt brake, anchored in the Basic Law, is to be relaxed for defense spending and on top of that for streets, bridges, rails and other things in the field of infrastructure, a special fund of 500 billion euros. On the market, the project was described unanimously as a “historical decision”.
“Germany will release hundreds of billions of euros for investments in these two areas, which is a drastic change of course because it turns the strict control of state debt upside down,” commented one market expert. Stephen Innes, Managing Partner at the SPI Asset Management asset manager, also spoke of a turning point. “The market does not lose time with the reassessment,” he summed up the course jumps on the German stock exchange.
Rheinmetall rose by 4.4 percent in the DAX, with the mark of 1,200 euros remaining a hurdle for the share. Airbus (Airbus SE (ex EADS)) won 2.3 percent and the papers of the engine manufacturer MTU (MTU Aero Engines) rose by 4.5 percent to a record high of 353.50 euros. With the minor values, Hensoldt was 9.5 percent high, while Renk with plus 8.6 percent of the record high achieved the previous day ran back.
Thyssenkrupp (Thyssenkrupp) climbed by 14 percent and at times reached the highest level since June 2022. This time the share was not only driven by the naval subsidiary TKMS, which Bofa analyst Jason Fairclough refers to as a “hidden armaments division”. In view of the infrastructure plans, the core division steel of the industrial group was also the focus of the investors.
In the Dax, Heidelberg materials attracted 14 percent as a favorite and reached a new record at a good 163 euros. For Siemens Energy, it went up by 9.6 percent. In addition, almost 22 percent jumped in the MDAX Bilfinger (Bilfinger SE) as a peak value in eleven years. Hochtief increased by 14 percent. At times, they had jumped up to a record high of just under 180 euros.
In addition, the shares of the rail technology company Vossloh, which rose by around 17 percent to the highest level since summer 2017, were also in demand. The stocks of warehouse technology companies such as Kion (Kion Group) or Jungheinrich also increased in two digits. Both are back at the course level in the summer of 2024.
Chief economist Jörg Krämer from Commerzbank was “relieved” that the future coalition partners wanted to create the financial prerequisites for it Bundeswehr to make defensive again. The factual withdrawal of the Americans means for the Western European democracies that they would have to be able to defend themselves against imperialist Russia in the future. “It is also right to provide a lot of money for the downloaded infrastructure, which is also a major problem for many companies.”
In the meantime, JPMorgan analyst David Perry calculated that in Germany one percent of economic output (GDP) meant an amount of around 45 billion euros for arms expenditure. It is still unclear how high the German defense spending will be in the coming years, “but it appears that it could be 3 percent or more because Germany tries to rebuild its military performance after 30 years of chronic under investment”.
The old Bundestag should decide on the changes next week. Because: In order to get the required two -thirds majority together, the vote on it must still take place in the current legislative period – with an additional broad support of the Greens or the full support of the FDP, as economist Krämer said. In the new Bundestag, AfD and Linke could block the projects. The Commerzbank expert not only sees a certain uncertainty on this point. In addition, a better infrastructure alone does not mean a restart in economic policy.
After the scandal in the White House between US President Donald Trump and his Ukrainian counterpart Wolodymyr Selenskyj, there is again signs of an approximation. Trump welcomed that the Ukrainian President had agreed to negotiate peace negotiations in a letter, and Russia also described Selenskyj’s willingness to negotiate peace. However, the question remains who wanted to negotiate with Selenskyj after talks with Kremlin chief Vladimir Putin declared an impossible by decree, said Kremlin spokesman Dmitri Peskow. Moscow requires a lifting of the ban from September 2022./CK/TIH/Stk
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