The DAX index started the trading week on a positive note, with a calculation of around 22,555 points by 9:30 am, a 0.2% increase over the closing level on Friday.
Rheinmetall’s papers were the clear leaders in the stock market, as the company is seen to be well-positioned for future growth in the face of increasing military spending discussions.
“Right now, international investors are jumping on the DAX, driven by robust quarterly earnings and forward-looking KI trends, such as those at SAP, even as geopolitical tensions and trade uncertainties remain in the background” said Jochen Stanzl, Chief Market Analyst at CMC Markets. Meanwhile, the upcoming German federal elections on February 23 have taken center stage, with the market hoping for a conservative government under CDU leadership to provide “market-friendly impulses” through reforms of the debt brake and tax cuts.
“However, a technical correction could still occur, as the DAX has risen so sharply. If a short-term sell-off occurs, it could trigger a chain reaction, with stop-loss orders being triggered. Classic technical overbought signals do lose some weight in a strong uptrend, as fundamental drivers such as solid earnings, pricing power and innovation in the AI space continue to support the market and prompt bargain hunters to jump back in at the first sign of a pullback” Stanzl added.
“In short, despite increased political uncertainty, the DAX remains on an uptrend, driven by attractive, internationally oriented companies, although investors should remain cautious in the face of potential short-term setbacks” Stanzl concluded.
The euro was slightly weaker against the US dollar on Monday morning, with one euro exchanging for around 1.0480 US dollars and one US dollar for 0.9542 euros.