German stocks have gone to their highest level in the last 5 years, thanks to the recovery stance being maintained by Mario Draghi, the President of the European Central Bank. According to Draghi, the economy of the Euro region will gradually recover later in 2013, despite of the fact that policy makers are constantly reducing their inflation and economic related forecasts.
The benchmark gauge DAX Index has jumped up by 0.3% and is currently at 7939.77. This marks the gauge’s highest level since January, 2008. In 2013 till date, the gauge has experienced an increase of 4.3%. On today, the broader HDAX Index has surged ahead by 0.3%. The overall volume of share trading was 21% less than the last 30-day average.
The Head of Equities Department of WGZ Bank AG, Matthias Jasper, stated that market had slightly higher expectation from Draghi; still overall picture is bright for the equity markets. Matthias added that probably many countries will continue their policy easing technique. Apart from that, the US markets are recovering on continuous basis, thereby, providing strong support for the other markets. Incidentally, the Dow Jones has already reached an all-time high figure.
Today, ECB predicted that the 17-country economy will experience a contraction of 0.5% in 2013. This is more than the 0.3% contraction predicted 3 months ago from today’s time. On the other hand, the 2014 inflation projected has been reduced to 1.3% from 1.4%. Policy makers have kept the benchmark interest rate at a record low figure of 0.75% and Draghi expects the economic outlook to recover, supported by a strengthening global backdrop and a proper monetary policy stance.
Coming to various German companies, the maker of Cancer drug Erbitux, Merck saw its share prices increasing by 2.9%, each of its shares being priced at 112.20 Euros now. After reporting a 272 million Euro net loss for last quarter of 2012, Adidas has been able to increase by 6.6% on today. Each of its shares costs 76.38 Euros now, marking its highest price since share sale in November, 1995.
The 2nd largest tire maker of Europe, Continental, also increased by 4.4%, reaching its highest price in last 6 years. Hannover Re increased by 2.6% as well and it is currently at its highest price level since January, 1997. Lanxess AG, the chemical maker experienced decline of 4.6%.