The DAX remained in negative territory on Thursday, continuing a slump that began at the market’s open. Around 12:30 pm, the index registered approximately 25,330 points, marking a 0.3 percent decrease compared to the previous trading day. Beiersdorf, Deutsche Telekom, and Allianz led the top performers, while Infineon, Volkswagen, and Rheinmetall finished at the bottom of the list.
The surprisingly strong Ifo business climate index released in the morning did not translate into rising stock prices. Thomas Gitzel, Chief Economist at VP-Bank Group, commented on the reaction, stating, “I would have lost the bet on rising economic confidence despite record-high energy prices.” He noted that German corporations are exhibiting robust performance, adding, “Optimism persists despite expensive energy. It is remarkable that the outlook for further business development is also improving.”
Gitzel explained that the German economy is currently benefitting from a marked increase in foreign demand. Furthermore, financial resources allocated by the federal government for infrastructure and defense are providing positive momentum. He observed that the German economy is defying rising oil prices and low water levels on German rivers, the latter of which continues to cause supply chain disruptions.
The economist concluded that the economic activity is gaining new momentum. He stated that an annual GDP growth of over one percent is now highly probable, suggesting that hopes are shifting toward a self-sustaining upswing. If this trend continues, increasing production will drive replacement or expansion investments. Given the rise of AI, he believes there is certainly enough demand for investment to sustain stronger growth over the long term.
Meanwhile, the Euro weakened slightly on Thursday afternoon; the euro traded at 1.1365 US dollars, while the dollar was available for 0.8799 euro. In parallel, oil prices increased. Around 12:00 German time, a barrel of North Sea Brent crude cost $104.70, representing a 1.6 percent gain from the previous day’s close.
