The German leading index DAX has broken the historic barrier of 20,000 points. Investors appear willing to pay significantly higher prices. There are only downward price corrections in the automotive sector.
The rally that started two weeks ago took the stock market barometer to a peak of 20,017 points in early trading. The surcharge was recently 0.4 percent. The MDAX of medium-sized listed companies rose by half a percent to 26,425 points.
The day before, the DAX had risen sharply by almost 1.6 percent. So far there are no signs of profit taking. “The DAX continues to trend upwards,” said Finanzethos chart analyst Martin Utschneider.
He talked about a breakout in the DAX that is currently happening. “Signs that Germany’s leading index could lead to a year-end rally have materialized.”
The automotive industry is lagging behind
According to strategic statements made by analysts, there are price movements in the automotive sector. Two investment houses, UBS and Barclays Bank, have reacted negatively to Mercedes-Benz. Their shares lost 1.6 percent. BMW, on the other hand, gained 1.4 percent thanks to a buy recommendation from UBS. At Porsche AG, a positive comment from Barclays Bank is offset by a downgrade to ‘neutral’ by UBS. The automaker’s shares rose slightly.
Market expert Holger Zschäpitz attributes the current increase to the fact that investors are currently willing to pay more for their shares: “Interestingly, this growth is not due to higher profits, but rather to an increase in investors’ willingness to pay for shares pay.”
The price-earnings ratio (P/E) of the DAX rose from 12.3 in January to 15.2 today. The rise in the DAX this year is fueled by higher valuations and not by higher profits.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
