Dax Rises to Weekly High After ECB Decision

In the stock market world, the European Central Bank (ECB) is providing a boost. The German benchmark index DAX climbed by 0.47 percent on Thursday, reaching the week's high at 17,800.29 points. Experts are already speculating whether the impressive seven-day record success, which elevated the DAX to almost 17,817 points the previous week, will soon continue. While the DAX recorded a moderate increase, other key European indices such as the EuroStoxx 50 and the French CAC 40 posted even stronger gains. The MDAX, home to mid-sized German companies, turned its earlier losses into gains and closed up 0.11 percent at 26,188.88 points. The ECB's perspective on a quicker inflation decline than forecasted last December is generating optimism in the markets. Additionally, there is speculation about possible interest rate cuts, as the ECB predicts a worsening economic situation in the eurozone. Ulrich Kater, the chief economist at DekaBank, interprets the situation quite positively and sees the eurozone on a good path to combat inflation. However, he stresses that the work is not yet done and the ECB can only truly be satisfied when the inflation target of 2 percent is achieved. He considers interest rate cuts likely from June, albeit more cautiously than some market participants might hope. The discussion about interest rates provided impetus particularly to the real estate sector. Vonovia shot to the top of the DAX with a 3.6 percent increase. In the MDAX, LEG, TAG Immobilien, and Aroundtown saw sharp rises, with their share price gains between almost 4 and 6.2 percent. On the losing side, Bayer stood at the end of the DAX with a decrease of 3.5 percent. The reason was a retracted buy recommendation from the analysis firm Bernstein Research, after Bayer had rejected the option of a split. The auto parts supplier Continental lost 1.6 percent after its annual figures and 2024 outlook failed to convince investors. Brenntag also suffered a decline of 2.8 percent, as the chemicals distributor presented a rather cautious expectation for the coming year. Meanwhile, Merck KGaA remained largely unchanged despite initial gains. Despite satisfactory results, UBS analysts seemed slightly disappointed by the lack of prospects for a revival in the life sciences sector after the stock's strong performance at the beginning of the year. In the MDAX, Hugo Boss stood out with a loss of around 12 percent, while in the SDAX, GFT Technologies fell by over 7 percent. Disappointment prevailed at Hugo Boss due to a sales and earnings target below expectations and a postponed sales forecast for 2025. At GFT Technologies, the pre-tax earnings forecast was particularly disappointing. The euro was traded at 1.0886 US dollars in the afternoon. On the bond market, the yield on bonds in circulation fell to 2.37 percent, the REX bond index rose slightly, and the Bund future also increased.