German Stocks Advance Ahead Because of Optimism on US Budget Agreement

German stocks are on a high for the 3rd consecutive day and the DAX Index is also on the highest level in last 5 years. The investors are optimistic that the US lawmakers will finally agree on a budget proposal and that had positive influence on the German stocks as well.

The DAX has gained 0.6% today and finished at 7653.58. This marks the highest value of the benchmark index of Germany since January, 2008. On 5th June, the index was on a low, but, since then has bounced back by 28% till this date. The index was largely helped by the Federal Reserve’s announcement of a third round of quantitative easing and agreement of European policy makers to complete an unlimited bond-purchase program. The broader HAX index has also increased by 0.6%. The commodity linked stocks were the biggest gainers today on a whole in German market.

Ion-Marc Valahu, who is the Fund Manager and also Co-Founder of Clairinvest, stated that all the investors are concerned over the fiscal cliff deal as the year is coming to an end. However, the markets are currently being helped by an assumption that the deal will indeed take place.

Coming to individual stocks, the 3rd biggest discount carrier of Europe, Air Berlin surged by 8.4% as the airline decided to sell its frequent flyer program. This marks the biggest gain for the company within the last 15 months. It is also expected that the discount carrier will have its 1st annual profit since 2007. Two of the biggest German lenders, Commerzbank AG and Deutsche Bank advanced by 3.7% and 2.2% respectively. The biggest reinsurer in the world, Munich Re has also surged ahead by 1.7% and is currently at 136.65 Euros per share. The biggest independent steel trader in Europe, Kloeckner & Co went ahead by 0.9% and is valued at 9.08 Euros per share currently. The largest steelmaker in the country, ThyssenKrupp AG also added 1.2%. Salzgitter, the 2nd largest steelmaker surged by 2.8%.

Of all the industry groups, the telecommunication stocks experienced most of the fall. The 2nd biggest sporting goods maker, Adidas also slid down by 1%. Sky Deutschland AG, the renowned pay TV provider of the country went down by 0.7%. The largest cable operator of Germany, Kabel Deutschland Holding AG plummeted by 1.1% as well.