Record-breaking heights approached as Dax begins with minor adjustments
The German stock market index, the DAX, started the new week with minimal changes, maintaining its presence above the 24,000 mark. At the market open, shares of Munich Re, FMC, and Merck were at the top of the price list, while by the end of the day, Rheinmetall, RWE, and MTU found themselves at the bottom.
Despite the fall in the oil price, the European common currency was slightly stronger on Monday morning. The price of one US dollar remained at 0.8582 euros, and a barrel of North Sea Brent decreased by 46 cents from the previous day's close, costing $66.13 at 9 am German time.
The DAX's potential to set new records hinges on continued global diversification benefits, central bank policy developments, government fiscal stimulus, and managing geopolitical tensions and trade uncertainties. Sector strength and divergence have been key factors, with the automotive and industrial sectors showing resilience, and defense and tech sectors, particularly companies like Rheinmetall and SAP, leading gains due to increased defense spending and AI/cloud demand.
However, the number of buyers has significantly decreased since the DAX surpassed the 24,000 mark again, reflecting a cautious investor sentiment. High valuations, sustainability of gains, and external risks like tariff conflicts, U.S.-EU trade deal implications, and geopolitical uncertainties contribute to occasional turbulence and volatility.
Market expert, Thomas Altmann of QC Partners, stated that the DAX's record high is still within reach, despite the recent decrease. The index trading above its 200-day moving average serves as critical technical support, and the Relative Strength Index (RSI) around 49 suggests potential oversold, supportive of upward movement.
In conclusion, while the DAX has maintained a steady presence above 24,000 since reaching this milestone and reached near record highs in mid-2025, its potential to set new records depends on continued global diversification benefits, central bank policy developments, government fiscal stimulus, and managing geopolitical tensions and trade uncertainties.
Businesses and investors are closely watching the DAX, as its record high is still within reach, despite recent fluctuations. The continued global diversification benefits, central bank policy developments, and government fiscal stimulus are crucial factors that could drive the DAX towards new finance milestones, while managing geopolitical tensions and trade uncertainties will play a decisive role in maintaining stability and minimizing volatility.
