The German stock market experienced a muted performance Monday, with the DAX index fluctuating throughout the trading day before ultimately closing slightly positive. The index reached approximately 23,170 points by midday, representing a gain of 0.3% compared to the previous day’s close. While Bayer, Siemens Energy and BMW led the gains, Rheinmetall, the Deutsche Börse and Allianz trailed behind.
The morning’s unexpectedly weak Ifo business climate index for November failed to trigger a significant market reaction, a development raising concerns over the underlying health of the German economy. Thomas Gitzel, Chief Economist at VP Bank Group, characterized the report as deeply disappointing, highlighting that companies are revising downwards their business expectations compared to October. “There’s simply no basis for talk of economic optimism regarding 2026” Gitzel stated, underscoring a growing disconnect between government pronouncements of recovery and the reality facing businesses.
While indicators have shown incremental improvements throughout the year, Gitzel warned that the current level of the Ifo index points toward only modest economic growth for Germany. This casts a shadow on Chancellor Scholz’s administration’s economic policies and raises questions about the government’s ability to stimulate sustainable growth, particularly given ongoing geopolitical uncertainties and the impact of rising interest rates.
The euro strengthened slightly against the dollar, trading at $1.1542, a modest boost but failing to offset broader anxieties regarding Germany’s economic trajectory. Concurrently, the price of Brent crude oil declined to $62.32 a barrel, reflecting persistent concerns about slowing global demand and potentially undermining energy-related sectors within the DAX. The muted market response to both the disappointing Ifo index and the falling oil prices suggests a cautious investor sentiment, prioritizing stability over speculative gains amidst increasing economic headwinds.