The Dax index closed slightly lower on Tuesday, at 22,410 points, a decline of 0.1% from the previous day’s close. After a weak start, the index briefly moved into positive territory in the afternoon before slipping back below the previous day’s level.
Heidelberg Materials, Volkswagen, Porsche Automobil and BMW led the gains, while Siemens Energy shares lagged behind.
According to Jochen Stanzl, chief market analyst at CMC Markets, the market’s optimism was driven by hopes for a more growth-friendly economic policy under a government led by the union. “Investors are anticipating a more robust economic recovery and this is reflected in the broader participation in the rally” Stanzl said.
The analyst attributed the rally to a growing expectation of an economic upswing, as indicated by the ifo index and other indicators. “The ‘Glorious Six’ – SAP, Siemens, Siemens Energy, Deutsche Telekom, Allianz and Munich Re – have been the driving force behind almost three-quarters of the index’s gains over the past year. Now, other stocks are also contributing to the performance of the index, which is a positive sign” Stanzl said.
Defense sector stocks, in particular, saw increased demand on Tuesday, with speculation about a special fund for defense spending and Thyssen-Krupp’s plans for a marine sector IPO adding to the sector’s appeal.
Meanwhile, the gas price declined, with a megawatt-hour of gas for delivery in March costing 44 euros, a 7% decrease from the previous day.
Oil prices also fell, with a barrel of Brent crude trading at 72.99 US dollars at around 5 pm CET, a 2.4% decline from the previous day’s close.
The euro was stronger against the US dollar, trading at 1.0501 US dollars, with the dollar available for 0.9523 euros.