The DAX index is hovering near its highest level since 30th October last year. It has recorded a 4,008.5-gain amounting to 34.7 per cent increase since it hit its lowest last year. It is currently trading at 15,550, a 0.7 per cent gain.
GDP Data Concerns
The DAX index responded to the European stock moderate gains as lessening of inflation fears saw euro zone government bond revenues fall for three consecutive days. Tech stocks gains were up 1.1 per cent as Stoxx 600 jumped 0.3 per cent in early trade.
The German economy shrank more than expected in the first quarter at the onset of the Corona virus pandemic. According to data released on Tuesday, the Corona restrictions pushed many householders to put more money than ever into savings. According to the Federal Statistics Office, Europe’s largest economy fell by 1.8 per cent quarter on quarter which amounted to 3.1 percent yearly loss.
Household spending tumbled 5.4 per cent below the normal rate on the first quarter. Savings rate rose to an unexpected high of 23.2 per cent. German household disposable income slightly increased. This was after the government’s efforts to put in billions of euros into job protection schemes and cash handouts.
Net trade took a nosedive as imports recorded a rise of 3.8 per cent. Strong demand from the United States and China saw the exports record a 1.8 per cent high.
According to data released on Tuesday, Germany’s benchmark 10-year Bund yield was down 0.154 per cent which was its lowest in thirteen days. Core yields were also down two basis points in early London trading.
European investors are closely eyeing Germany’s latest Ifo business climate survey. The data is expected to show an improvement. Michael Leister, head of interest rate strategy at Commerzbank, stated in a note to his clients that:
“Today’s data flow should stay upbeat with the Ifo set for another improvement. The service and trade sectors should drive the uptick this time, reflecting hopes of a far-reaching easing of the current COVID restrictions in view of falling infection rates.”
DAX Top Movers
Deutsche Wohnen was the best performer in the DAX index. Delivery Hero and Infineon were also among the top performers.
Vonovia and Fresenius SE were the worst performers in the index.