The DAX maintained a strong upward trend on Monday afternoon, continuing the very positive start seen earlier in the day. By approximately 12:30 PM, the index had reached around 25,475 points, representing a 1.5 percent gain compared to the previous trading day. Key stocks leading the list included SAP, Zalando, and Bayer, while Hochtief, RWE, and Eon concluded the session in negative territory.
Positive market sentiment was bolstered by a surprisingly strong Ifo business climate index released in the morning. Thomas Gitzel, Chief Economist at the VP-Bank Group, commented that the flow of data from Germany had recently exceeded positive expectations, specifically highlighting solid increases in incoming orders. Given these favorable figures, he noted that the comments from the companies surveyed by the Ifo Institute are now particularly interesting.
Indeed, the key German economic barometer improved for the third consecutive month in July. However, Gitzel suggested that a temporary improvement in the situation regarding the Iran war might have positively influenced the Ifo survey. He stated that the situation had intensified significantly in the past week, a development that was not fully reflected in the latest Ifo Institute survey.
Gitzel summarized the outlook by saying, “The German economy is performing surprisingly well given the adverse circumstances.” He added that this robust performance would likely be reflected in growth in the second-quarter GDP, which would be a success considering the rise in oil prices. He emphasized that domestic programs, such as the infrastructure and defense initiatives of the German government, are not the primary drivers. Instead, Gitzel pointed out that, as evidenced by incoming orders, demand for German products from abroad is increasing, suggesting the German economy is in better shape than often assumed.
Globally, the European community currency was slightly stronger by midday: the Euro exchanged for 1.1398 US dollars, meaning the dollar cost 0.8773 Euros. Meanwhile, the oil price dropped sharply. At around 12 PM German time, a barrel of North Sea Brent crude cost 88.89 US dollars-a reduction of 7.89 dollars, or 8.2 percent, compared to the close of the previous trading day.
